Aggregate Risk Controls for Gross Notional Exposure

IEX Trading Alert #2017 - 016

Overview

As a reminder, IEX offers an optional Aggregate Risk Control ("ARC") for gross notional exposure mechanism to any IEX Member or Clearing Firm.

Additional Detail

IEX ARC for gross notional exposure accumulates the notional value of trading for a Member or Clearing Firm's broker correspondent and will automatically reject new orders and cancel all open orders when gross notional exposure has exceeded a predetermined limit. ARC can be configured to accumulate across MPID(s), by MPID, by FIX session, or in combination, per Clearing Firm relationship.

Gross notional exposure is calculated as the absolute sum of the notional value of all buy and sell trades (equal to executed buys plus absolute value of long sells plus absolute value of short sells). There is no netting of buys and long sales in the same symbol or across symbols. Gross notional exposure resets for each new trading day.

IEX will notify the Member or Clearing Firm once:

  • 70% of the gross notional exposure is met
  • Gross notional exposure is subsequently exceeded

Utilizing ARC

Members and Clearing Firms must contact IEX Market Operations (contact details below) to arrange to utilize ARC.

Please note that gross notional exposure limit configurations are subject to the following stipulations:

  • Limits can be increased or decreased intraday
  • If a firm and its clearing firm set limits separately, the lower limits apply
  • If ARC limits are set by a clearing firm for a correspondent firm, IEX will advise the correspondent firm of the limits

More Information

Please contact IEX Market Operations or Sales with any questions:

About IEX

IEX is on a mission to build fairer markets. Founded in 2012 and headquartered in New York City, IEX introduced its first trading venue in 2013 and launched as a U.S. stock exchange in 2016. IEX is the stock exchange that believes that every investor has the right to trade on equal and fair terms, on every trade. Learn more at: iextrading.com.