NASDAQ Announces Improved Protections for Equity Markets Coming Out of Halts (“Leaky Bands”)
OREANDA-NEWS. April 13, 2016. As part of the overall strategy to improve the client experience and strengthen risk protections, Nasdaq is taking additional measures to ensure that when securities come out of a halt they are not traded without the expected LULD bands present. Starting April 15, 2016 Nasdaq will improve halt protections to ensure the presence of LULD bands immediately after the resumption of trading.
For Nasdaq-listed securities, Nasdaq will calculate an interim LULD band that will be applied in the gap between the resumption of trading on Nasdaq, and when the bands are subsequently received from the SIP.
Nasdaq will ensure that both a firm quote and LULD bands from the appropriate SIP are received before a non-Nasdaq listed security is reopened for trading after being halted. We would like to recommend and encourage liquidity to be sent to the primary exchange during a trading halt.
These improved protections will close a minor gap in the application of LULD bands and help prevent executions outside of the bands.
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