Version 1.0 January 2008
Dedicated Access for Executable Quotes in Covered Warrants and Other Structured Products TradElectTM Segments
SERVICE DESCRIPTION
January 2008
Table of Contents
1.Introduction
2.Project implementation date
3.Business Changes
3.1Background
3.2New Service Description
3.3Security coverage
4.Technical & Rule changes
4.1Service
4.2Set up
4.3Throttling
4.4Validation
4.5Testing
4.6Migration to Production
4.7Exchange Rule Changes
5.Application process
6.Amending capacity or terminating service
7.Further Information
1.Introduction
This document provides details of a service that is available only on application by a member firm and is subject to approval by the London Stock Exchange. It allows member firms to purchase Executable Quote entry for covered warrants and other structured products on a fixed block basis rather than paying per individual quote entered. The service is only available for TradElectTM segments INSD and LVSD.
2.Project implementation date
Go-live / 1 February2008Dedicated Access for Executable Quotes in covered warrants and other structured products TradElect segments isan optional service and does not change the Rule based obligations,rights or pricing for member firms who do not use the service.
3.Business Changes
3.1Background
Currently member firms that enter Executable Quotes in TradElect segments INSD and LVSD are required to restrict their entry rate to pre-agreed submission levels and are charged according to the number of quotes that they enter. Due to the nature of the markets concerned quote submission rates in an individual product are often intensive. This new service will allow for an increase in the number of products that high usage participants are able to animatequotes in by allowing them to apply to purchase in advance dedicated access to these segments in blocks of 100 messages per second.
3.2New Service Description
Subject to agreement and successful testing a Member Firm will be able to apply for a variation to its Trading Services Agreement. This will be done by a signed side letter allowing it to opt out of the standard quoteentry charges for TradElect segments INSD and LVSD. Instead it will be able to buy blocks of quote access priced in multiples of 100 messages per second. As detailed in 4.3, throttling will actually take place at a more granular level, all figures quoted are in normal operating conditions and are in no way guaranteed.
Once a member firm has agreed its dedicated access level it may use the messages across its INSD / LVSD securities as it sees fit subject to the operation of 4.3 below.
A revised price list will be issued providing the tariff charge for each 100 messages per second purchased on a monthly basis.
3.3Security coverage
The service is only applicable for covered warrants and other structured products that are found in TradElect segments LVSD and INSD. The Exchange will not consider any applications for other trading segments.
4.TechnicalRule changes
4.1Service
To provide access for INSD/LVSD Executable Quote messageflow. All nonINSD/LVSDmessage flow will continue to use existing connectivity mechanism/setup which going forward will be restricted from a submitting Executable Quotes to INSD/LVSDsegments. This will require an appropriate level of CDS testing to the satisfaction of all parties.
4.2Set up
The Exchange will evaluate the solution required and make any necessary changes to both CDS testing and Production environments.
This may require some or all of the below:
- New Exchange IP address;
- New USAP(s); and
- New Tradergroup(s).
The new Tradergroup setup will have access toINSD/LVSD segments only, throttled at agreed submission rate; and restrictions made on access to INSD /LVSD for existing Tradergroup(s).
4.3Throttling
Customers will be throttled at the Trading Gateway. Whilst the service will be priced per 100 messages per second, to ensure effective smoothing throttling will take place in units of 10 messages per 100milliseconds.
4.4Validation
Validation will be consistent with the Exchange’s current approach.
4.5Testing
- CDS access including connectivity, connect/disconnect test, sustained and burst volumes up tothrottle limitmessages per second;
- Full functionality testing;
- Live Connectivity testing Production connectivity test as required; and
- Testing / Migration plan to be agreed with the Exchange.
4.6Migration to Production
Final date will only be agreed once both the Exchange and member firm agree that the testing phase has been successfully completed.
4.7Exchange Rule Changes
There are no Exchange Rule changes required to support this service.
5.Applicationprocess
To apply to be considered for the service, Member Firms should contact their account managerin writing. The Exchange will then work with the firm to establish an appropriate testing and implementation timeline.
6.Amending capacity or terminating service
Once set up in the service a member firm can amend its capacity purchased or terminate the service completely by giving the Exchange 2 months notice. On termination of the service a member firm would revert to the standard quote entry tariff.
7.Further Information
The Exchange will keep the operation of the service under review and reserve the right to vary the terms of its operation.
If you have any further questions, please contact your account manager.
This document has been produced by the Exchange to assist users of the Exchange’s systems. While it has been prepared on the basis of the best information available, the Exchange accepts no liability for decisions taken, or systems work carried out between any party, based on this document. This document does not form part of the contractual documentation between the Exchange and its customers.
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