Nadex aims to amend trading halt rules

Maria Nikolova

Nadex aims to add a provision which authorizes the Exchange to halt trading, and/or refrain from listing contracts when the corresponding underlying market upon which the Nadex contract is based is halted due to a lock limit up or limit down.

North American Derivatives Exchange, Inc. (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), is proposing to amend its rules concerning trading halts.

The Exchange has submitted to the Commodity Futures Trading Commission its amendments to the Nadex Rulebook in Rule 12.1. The proposals seek to add a provision which authorizes Nadex to halt trading, and/or refrain from listing contracts, in its market(s) when the corresponding underlying market upon which the Nadex contract is based is halted due to a lock limit up or limit down.

The proposed provision states:

“(i) Limit Up/Limit Down – In the event the corresponding underlying market upon which any Nadex contract is based is subject to a lock limit up or down, Nadex may halt trading in its related market, and/or refrain from listing contracts in that market, until trading resumes in the underlying market. Should Nadex halt and/or refrain from listing contracts pursuant to this section, notice of the halt, and any adjustments to the settlement process, will be posted on the Notices page as soon as practicable”.

The amendments are set to become effective September 18, 2018.

Let’s recall that under Nadex’s rules, in the event that any market irregularities are declared by the Chief Executive Officer of the Exchange, a market may be halted for trading, and the Commission will be notified, if required, pursuant to Commission Regulations. An explanation will be posted on the Nadex Notices section of the website within a reasonable amount of time but no later than 24 hours after the initiation of the halt.

Nadex may, in its discretion, temporarily refrain from the listing of any contract due to the unavailability of the underlying market upon which the Contract is based, or any other condition Nadex determines may be detrimental to the listing of the Contract.

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