ICE to implement new Self-Trade Prevention Functionality
Effective trade date March 1, 2021, ICE Futures U.S. is implementing a new Self-Trade Prevention Functionality (STPF), subject to regulatory review. The new order-based STPF functionality will be available in the ICE user portal in ICE Identifier Admin on February 26, 2021.
The existing STPF, which was released in 2013, will continue to be available for those firms opting to utilize the functionality, until at least 2022, when the legacy functionality will be retired. However, those firms required to utilize the Exchange’s STPF are advised to take proactive steps to migrate to the new STPF promptly. They will be required to fully migrate to the new STPF by the third quarter of 2021.
Companies that are already using the existing STPF functionality will need to advise ICE User Administration of their desire to switch to the new STPF functionality.
The new STPF functionality builds on the Exchange’s legacy STPF, with important updates to provide for additional flexibility and customization. The new STPF will reside within the ICE trading engine and provide various automated configurations to prevent self-trading of orders entered with the same STPF ID. This may include orders entered within the same trading firm or across trading firms.
Trading firms manage their STPF ID through ICE’s proprietary user portal in ICE Identifier Admin and will have the ability to share an STPF ID to other third-party firms and/or affiliates. For those users utilizing the new functionality, the STPF ID is contained in Tag 9821 (SelfMatchPrevention ID), and the STPF instructions (Reject Resting Order (“RRO”); Reject Taking Order (“RTO”); Reject Both Orders (“RBO”)) are contained in Tag 9822 (SelfMatchPreventionInstruction) of orders entered.
Unlike the prior version of STPF, the updated STPF is required to be set up and administered by trading firms themselves. Specifically, trading firms create an STPF ID that can be deployed for any of its traders, and/or on specific orders. Trades are prevented between any outright orders with the same STPF ID, as well as between same-spread-to- same-spread orders with the same STPF ID. This occurs whether the orders are entered by the same trading firm or trader on both sides, or different trading firms or traders, as STPF ID uniqueness is enforced across trading firms.
The use of the Exchange’s STPF continues to be mandatory for proprietary traders with direct market access who utilize algorithmic trading applications.