Nasdaq Redistributes Risk in Trading Rule Update
Published Date: 6/13/2025
Notice
Summary
Nasdaq is updating its rules to let clearing members (the folks who handle the final steps of trades) take on more responsibility for managing risk settings. This change affects trading participants who don’t clear their own trades and aims to make risk management smoother and clearer. The new rule is effective immediately, helping the market stay safe without slowing down trading or adding extra costs.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Clearing Members Can Be Assigned Risk Duties
As of the Exchange filing on May 29, 2025, Nasdaq permits a Participant that does not self-clear to designate its clearing member to establish and adjust the Participant's risk settings on the Exchange. The clearing member, if authorized by the Participant, may set and view those risk levels and thereby assume responsibility for managing those risk settings within Nasdaq's system.
Participants Still Retain Compliance Responsibility
Nasdaq makes clear that use of the Exchange's risk settings does not automatically meet all Exchange or federal rule obligations and that responsibility for compliance with Exchange and SEC rules remains with the Participant. The Exchange cites Rule 15c3-5 and notes that these controls are not guaranteed to be comprehensive.
Visibility, Revocation, and No Latency Change
If a Participant designates its clearing member, the Participant can still view any risk levels the clearing member sets and will continue to be notified by the Exchange of actions related to its trading activity. The Participant may revoke the clearing‑member designation at any time, and Nasdaq states there will be no difference in latency for orders whether or not a Participant opts into these risk settings.
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