In other FinTech news, EDI wants to help firms with IRS compliance and Bloomberg Tradebook embraces relativity.
ETP Transactions Impacted by NYSE Arca Halt
Exchange-traded product transactions via NYSE Arca were halted for 15 minutes on the morning of Monday, Dec. 19, because of a complication caused by a software upgrade, according to New York Stock Exchange officials.
“We identified an issue on NYSE Arca Equities (our electronic market for ETPs [including exchange-traded funds] and elected to suspend trading for 15 minutes from 10.50 to 11.05AM to resolve the issue in a way that minimized disruption to our customers,” says Kristen Kaus, a NYSE corporate communications spokeswoman, in a prepared response to FTF News. “ETP trading continued on other markets during the suspension. Trading resumed at 11.05AM and continues to trade normally. No other NYSE markets were impacted.”
ETPs include ETFs, exchange-traded notes (ETNs) and exchange-traded vehicles (ETVs), according to NYSE Arca’s website. “As of September 2016, NYSE Arca’s listed ETPs had over $2.2 trillion in assets under management (AUM), representing over 92% of all U.S. listed exchange-traded products (ETPs).”
Officials add that NYSE Arca “trades more than 8,000 exchange-listed securities.”
Exchange Data International Readies Service for IRS Compliance
Exchange Data International (EDI) recently announced that it is readying an indices service to help firms meet an Internal Revenue Service (IRS) withholding requirement on certain equity-linked instruments [871 (m) Compliance] that takes effect Jan. 1, 2017.
The amendments to regulation 871(m) were announced in September 2015 and take effect January 1, 2017, EDI officials say. “These changes require dealers to withhold U.S. federal taxes on certain equity linked instruments, including those which reference indices. IRS guidance notes published on December 2 provide further details on enforcement and administration during the phase in period.”
EDI officials “reviewed the universe of underlying indices for derivatives traded on the full list of exchanges recognized by the IRS,” according to the vendor. “Index composition, weightings, dividend yields, and rebalancing methodologies for each are analyzed against the IRS 871(m) qualified indices definitions allowing each index to be appropriately flagged.”
Dealers will need to “identify which equity-linked instruments are in scope and as part of that determination the IRS has provided a set of criteria for qualified and non-qualified indices as part of 871(m),” officials say.
EDI’s content database includes worldwide equity and fixed income corporate actions, dividends, static reference data, closing prices and shares outstanding, delivered via data feeds and the Internet, officials say.
Bloomberg Tradebook Algo Aids Relative Trading
Agency brokerage Bloomberg Tradebook has released its Relative Benchmark Trading algorithm for its cross-asset trading platform, PAIR {PAIR<GO>} that should help buy-side traders more control, officials say.
“In today’s complex global equity markets, buy-side traders need an integrated system for order and execution management that can help them gain greater control of their trading decisions,” says Michael Baradas, cross asset product manager at Bloomberg Tradebook, in a prepared statement. The new Relative Benchmark Trading algorithm on the PAIR platform helps clients “implement and execute the most effective alpha-generating strategies,” Baradas says.
With the new function, Bloomberg Tradebook clients can trade one security relative to a set benchmark, which helps traders “generate alpha, reduce the costs of trading and better manage risk,” vendor officials say.
The Bloomberg Tradebook PAIR platform was launched in 2009 for trading multiple asset classes, including equities, options and futures, globally, officials say. The platform is fully integrated with the Bloomberg Professional service to facilitate the trading of multiple securities across asset classes, officials add.
Need a Reprint?
