Nasdaq PHLX LLC Updates Review of Professional Orders
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The new rule by Nasdaq PHLX updates how frequently orders from high-volume customers are designated as 'Professional.' Instead of quarterly checks, the review will now occur monthly. This change ensures more timely identification, affecting how broker-dealers and compliance teams categorize client orders.
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Key Changes
- Switches order designation checks from quarterly to monthly.
- Designates customer orders exceeding 390 trades per day as Professional.
- Aims for quicker updates in client order categorization.
Obligations
What this law requires
Broker-dealers must review customer orders monthly to classify them as either Professional or Public Customer orders and update their designations accordingly.
Member organizations must review their Public Customers' trading activity and designate orders as Public Customer or Professional Orders on a monthly basis rather than quarterly, specifically for customers averaging more than 390 orders per day.
Member organizations must review their Public Customers' order activity on a monthly basis to determine if orders should be represented as Professional orders.
Member organizations must designate orders as Professional orders for any customer that averaged more than 390 orders per day during any calendar month.
Broker-dealers must continue to perform daily calculations of customer order volumes to determine if a customer qualifies as a Professional by averaging more than 390 orders per day during the preceding month.