Standardize and Simplify Order Types
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).
General Questions Regarding All Risk Controls
106. For each of the specified controls described above [ See sections III.C-F], please indicate whether you are already using the control on customer and/or proprietary orders. If applicable, please also indicate how widely you believe the control is currently being used in the market, and how consistent the application of the control is among firms.
107. If possible, please indicate specific costs associated with implementing each of the risk controls described above [ See sections III.C-F]. Please include detailed estimates, distinguishing between the cost of developing the functionality, the cost of implementation, and the cost of ongoing operations.
108. Please describe the specific benefits associated with each of the risk controls. Where possible, please indicate the market participant category(ies) to which the benefit would accrue.
109. Please comment on the appropriate order of implementation and timeline for each risk control, including any distinctions that should be made based on the category of registrant or market participant implementing the same or similar control, whether the market participant is using DMA, and whether implementation is already in place for certain categories.
110. Are any of the risk controls unnecessary, impractical for commercial or technological reasons, or inadvisable? If so, please note the control and provide reasons why.
111. A number of the pre-trade risk controls contemplated above are similar protections at distinct points in the life of an order.
a. Please comment on the utility of redundant pre-trade risk controls and the desirability of risk control systems in which controls are placed at one or more than one focal points.
b. If pre-trade risk controls should reside at one or more than one focal point, then please identify, for each risk control, what that focal point should be?
112. Are there risk controls that should be implemented across multiple entity types? If so, which controls and for which types of entities should they apply? Also, please comment generally on the factors the Commission should consider when determining the appropriate entity(ies) upon which to place a risk control requirement that could pertain to more than one entity.
113. Are there controls that should not be considered for overlapping implementation across exchanges, clearing members and market participants? If so, please explain which ones and why.
114. Each of the risk controls is described in general, principles-based terms. Should the Commission specify more granular or specific requirements with respect to any of the controls to improve their effectiveness or provide greater clarity to industry participants? If so, please identify the relevant control and the additional granularity or specificity that the Commission should provide. Are any of the controls, as currently drafted, inadequate to achieve the desired risk-reduction?
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