7.12 Telephone Market
Rule 7 shall apply in respect of those Contracts as determined, and shall be effective for such period of time as specified, by the Exchange (“Telephone Contracts”).
The Exchange may implement the Telephone Market for any or all Contracts which are, for whatever reason, not otherwise available for trading on the Cleartrade Platform. Members may organize/negotiate and execute in accordance with the Rules, subject to Rule 7, transactions involving designated Telephone Contracts.
a. The Exchange will notify Members of those Contracts available for trading in the Telephone Market, the opening times for the Telephone Market, and, if practicable, the expected duration of the Telephone Market by whatever means of communication it deems fit.
b. Any Member is permitted to participate (i.e. place orders) in the Telephone Market, providing that it holds the relevant trading right for the Contract concerned.
c. Only Broking Members, Clearing Members, Authorized Members and Block Trade Broking Members may submit Telephone Trading Contracts directly to the Exchange in accordance with Rule 7.
Negotiation of business in the Telephone Market may be undertaken by any of the Members’ staff registered with the Exchange or otherwise authorized by the Member to do so.
7.12.1 Client Notification
Members shall ensure that any clients wishing to undertake business are made aware that a Telephone Market is in operation. Members shall make clear to the potential counter party(ies), whether a Member or a client, that the price being quoted is in respect of contracts made available in the Telephone Market.
7.12.2 Trade Execution
In executing business in the Telephone Market, Members shall be required to act with due skill, care and diligence, in the best interests of their clients and in accordance (where applicable) with the Trading procedures, and Rules 5 and 7.
When a trade is agreed, the counterparties to the trade must immediately record (and retain) the following details on an order slip, and indicate that the trade is a trade executed on the Telephone Trading market:
c. contract month/strike;
f. client identification (if applicable);
g. counterparty ( Member mnemonic);
h. Member mnemonic;
i. time (including date);
and his information must be retained by the Member for a period of no less than three years after the date of the transaction. Members must ensure that any telephone line used in connection with the execution of a trade on the Telephone Trading market, including the giving and receipt of orders, is tape recorded and retained for a minimum of three months. The tapes are to be available to the compliance department upon request.
7.12.3 Trade Matching and Clearing
In the event of a Telephone Market being implemented, the Block Trade Broking Member of a transaction in respect of the designated Telephone Contracts will be required to enter all transactions traded on the Telephone Market promptly into Cleartrade Block Trading Facility as Block Trading transactions, for trade matching and clearing processing.
Members shall adhere to the published trading hours for the Telephone Market, enter trade details promptly following execution and ensure that all trade details are submitted to Cleartrade Block Trading Facility within 30 minutes of the close of trading for the Telephone Market.
If for any reason, the Cleartrade Block Trading Facility is not available to Members, each Member may register Telephone Contracts with the Exchange using email, fax, or telephone.
7.12.4 Price Limits and Trade Invalidation
The Exchange may in its absolute discretion and in conjunction with the Relevant Clearing House, implement price limits in respect of each designated Telephone Contract, taking into consideration factors as it feels fit.
The Exchange may, in its absolute discretion, invalidate any trade which it considers to fall outside any price limits or is considered an unrepresentative reflection of fair market value for the Contract and contract month concerned.
7.12.5 Price and Volume Transparency
The Exchange will regularly throughout the duration of the Telephone Market disseminate to Members volume and price information relating to trades submitted by Members to Cleartrade Block Trading Facility or directly to the Exchange using email, fax, voice broadcasting or telephone.