TXSE proposes changes to opening and closing auction rules
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This notice says Texas Stock Exchange wants to change how its opening and closing auctions work. The main effect is that late auction orders would be limited by a market-based price band tied to recent trades and quotes, not just the NBBO, which could make it easier for traders to add liquidity near the open and close without creating as much price swing. The filing also moves some order cut-off times earlier, locks certain orders from being changed or canceled closer to the auction, adds another tie-break step when setting auction prices, and renames some late order types. Broker-dealers, trading firms, and firms that route or manage auction orders on TXSE should review order-entry systems and timing controls. The SEC is asking for comments and has not approved the change yet.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Late auction orders would be capped by a Participation Band based on recent trades and quotes instead of the NBBO.
- LOC, MOC, and late close orders would have earlier cut-off times and tighter no-change/no-cancel windows; opening auction RHO orders would also be locked from 9:28 a.m. to 9:30 a.m.
- TXSE would add a new tie-break step in auction price setting and rename late order types to LOC.L and LOO.L.
Obligations
What this law requires
TXSE market participants submitting Late-Limit-On-Close (LOC.L, formerly LLOC) and Late-Limit-On-Open (LOO.L, formerly LLOO) orders must treat those orders as subject to the applicable Participation Band rather than the NBBO; if a bid is more aggressive than the Upper Band or an offer is more aggressive than the Lower Band immediately before the auction, TXSE will adjust the order price to the relevant band limit.
TXSE market participants must use the revised Late Auction Order logic: late limit-on-close and limit-on-open orders will be constrained by the applicable Participation Band (based on recent TXSE-listed security quotes and/or trades) rather than the NBBO, and any buy or sell order priced more aggressively than the band’s upper or lower limit will have its limit price adjusted to that band boundary for auction participation.
Firms may not modify or cancel LOC, MOC, or LOC.L orders after 3:58 p.m. for the Closing Auction, and may not modify or cancel RHO orders between 9:28 a.m. and 9:30 a.m. for the Opening Auction.
Users may no longer amend or cancel Late Auction Orders after entry, and Eligible Auction Orders may not be modified or cancelled after 3:58 p.m. for the Closing Auction.
Users submitting LOC and MOC orders for the Closing Auction must do so no later than 3:58 p.m., and users submitting LOC.L orders may submit them starting at 3:58 p.m.