"Effective June 2013, CME Globex will launch Self-Match Prevention functionality. This new opt-in service will prevent orders with the same Self-Match Prevention Identifier (SMP ID) and Executing Firm ID from trading against each other. This launch introduces new iLink tags and values. Detailed information, including messaging impacts and launch schedules, is available in the Client Impact Assessment. Customers are required to register to obtain their SMP ID(s) via the Firm Administrator Dashboard interface starting June 3, 2013. SMP ID registration is not required for Partner Exchange markets hosted on CME Globex. Customer certification is not required, but CME Group strongly recommends all system providers test these changes thoroughly in New Release. A Frequently Asked Questions (FAQ) guide is now available. Please contact your Global Account Manager with any questions or concerns at 312-634-8700, in Europe at 44-20-3379-3754 or in Asia at 65-6593-5574 for additional information." I know I self match through implieds sometimes, unvolontarily. Will the self matching through implieds will be stopped too?
Apparently SMP is optional in fact: http://www.cmegroup.com/globex/reso...xactTarget&utm_campaign=CME+Globex+Notices#q7 and implieds are not subject to SMP.
It is pretty clear this is motivated by predator firms ... ... easy to see how this will be used to conveniently "stop" the market somewhere with a large resting sell order, accumulate quietly, then go long some at MKT which will auto-cancel the large resting sell order and screw all sellers in one easy step. How convenient. HFT firms have made stock exchanges implement a number of exotic orders for their very own benefits, it appears this is spreading to the CME.
I thought they were trying to knock down these knee jerk drops and sudden swoons in the indexes by computers? I hope there's more to this in the details.
If this functionality were mandatory and not opt-in, then IMHO it would stabilize the markets and would decrease the gamesmanship and spoofing.
They're doing this on behalf of customers who get dinged by the CFTC for crossing their own orders. Traders using multiple instances of automated spread apps and traders who have several traders within one group, don't have the visibility or the ability to avoid crossing themselves. Do enough of that and the CFTC will fine you. I know first hand.