103. Please explain whether it would be beneficial for exchanges to develop and document policies and procedures for regularly reviewing contracts on other exchanges in order to identify those that are "linked to" or that are "a substitute for" contracts listed on its own market.
5. Standardize and Simplify Order Types
This Concept Release inquires about the possible standardization and simplification of order types that have complex logic embedded within them. A proliferation of order types, both within and across exchanges, can result in a similar increase in both the expected and unexpected responses of automated systems to order and trade signals. As of
FOOTNOTE 121 See Peter Chapman, "Too Many Order Types, Traders Fret,"
FOOTNOTE 122 The
FOOTNOTE 123 See SEC Roundtable Transcript, supra note 2, at 96 ("It is the proliferation of all these order types and the complexity of these order types that is adding unnecessary complexity to the market, which is already an extremely complex system as it is . . . when you have complex order types, it leads to extremely complex testing scenarios, and you are not going to pick up all the things you could or should because you don't know what that actual matching engine logic is in general."). END FOOTNOTE
104. Please explain whether the standardization and simplification of order types that have complex logic embedded within them would reduce the potential for instability and other market disruptions. If not, what other measures could achieve the same effect?
105. If the Commission were to consider the standardization and simplification of order types in a future rulemaking, please identify who should conduct this review (i.e., the Commission, trading platforms, or other parties).
G. General Questions Regarding All Risk Controls Discussed Above
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