Order Protection
Chapters in this video
- 0:00 Trade-through definition and exam limits
- 1:38 After-hours prints and manual quotes
- 2:16 Trading center carries the duty
- 3:25 Written procedures, surveillance, and remediation
- 4:36 Built-in exceptions versus SEC exemptions
- 5:30 Order protection lookalikes and locked markets
- 6:38 Rapid-fire order protection recap
What this video covers
- What makes a trade-through: an NMS stock, regular trading hours, principal or agency capacity, and a price below a protected bid or above a protected offer
- Why an after-hours print and a trade through a manual quotation do not qualify as trade-throughs
- Why the duty falls on the trading center, not the trader, customer, or routing broker
- How written policies and procedures must be established, maintained, enforced, regularly surveilled, and promptly corrected
- Why the order protection rule is based on reasonably designed procedures rather than a strict per-trade guarantee
- The difference between a built-in exception and an exemption granted by Securities and Exchange Commission (SEC) order
- How best execution and the access rule differ from order protection, including why locking a market is not a trade-through
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 57 course also includes adaptive practice questions and spaced-repetition flashcards, available in Free Beta.