US stock exchange operator Direct Edge will introduce new rules from 4 June that will require its members to identify the nature of their orders more clearly.
The requirement is part of a new rule by regulator the Securities and Exchange Commission that obliges exchange members to stipulate whether their orders are made in the capacity of agency, principal or riskless principal.
Direct Edge already asks members to specify this information via a FIX tag, but this is not a regulatory requirement and members can leave blank the field that specifies the capacity in which a trade is conducted. From 4 June, Direct Edge will not accept orders that do not have this information included.
FIX Protocol Limited (FPL), operator of the FIX financial messaging standard, has been working on improving the information supplied on a post-trade basis to the buy-side via their brokers.
Speaking to theTRADEnews.com’s recently launched US site, Brian Lees, manager of application development at buy-side firm The Capital Group Companies and co-chair of the FPL execution venue group, said greater consistency in trade data would increase efficiency for the buy-side.
Areas targeted by the FPL working group in addition to identification of the capacity in which trades were executed, include greater consistency in reporting the venue of execution and detailing whether trades were passive or aggressive. The latest set of guidelines formed by the FPL group is due in Q2.