NX rule- compliance issue?

Discussion in 'Prop Firms' started by jmathers34, Jul 10, 2002.

  1. Someone in the broker ratings said that if one trader at a prop firm NXs a stock the 30 second rule (cant enter another NX order) is in effect for every trader at the firm trading that particular stock. Specifically he said,

    "The NX rule is a compliance issue...Other firms who have violated this rule are indeed in trouble with NASD and NYSE. There has to be that 30 second delay between all traders at prop firms. Firms that let all their traders just execute NX trades have had their red flags raised."

    Does anyone at Bright or Echo or any other firm know if this is true?
  2. I know it's true. I don't know if all firms do it, but apparently, if they are being honest, the prop account is treated as one account and therefore the exchange sees every prop order from that firm as coming from one account. bummer, huh?

    I just wonder how much of my nx blues are caused by that. If the nicee wants nx to be a real ecn, they need to get off that silly rule anyway, and all the other silly rules that prevent it from becoming an ecn. But they won't, because what will the specialist do?
  3. I hope the regulators don't subject the 30 second NX rule on a prop firm basis per stock but on a per trader basis per stock else there would be a big mess out in propland.
  4. treats the account as if it were one big, fat, ill tempered person. with a thousand personalities.
  5. Actually the conglomeration of a prop firm as one huge firm is sort of fair because the NYSE treats this the same for member firms. For example, when I was trading for a top tier investment bank, the firm had to net all positions. Thus, if I had a long position, but the firm had a net short position, I would have to liquidate positions on an uptick or zero plus tick.
  6. So what you are saying is that if the SRO's stay consistent with their definition of what an account should be then a prop firm should impose the nx 30 second rule on a per firm per stock basis else big mess?
  7. Bryan Roberts

    Bryan Roberts Guest

    just my two cents, (my ten cents is free) this sounds more accurate than the previous stated opinion that was written by a worldco trader on the broker's ranting, uh um, i mean ratings page.
  8. Chasinfla is 100% correct in the way the NYSE and NASD interprets the NX rule. His characterization as one big ill tempered person with a 1000 personalities is dead on. Great analogy.
  9. I considered trading at world co. The main reason i chose not to was because of their nx rule. WHen you want to get a fill on a trade, your best bet is nx.
    #10     Jul 13, 2002