Electronic Trading and Order Routing
Systems Disclosure Statement
Electronic trading and order routing systems differ from traditional open outcry
pit trading and
manual order routing methods. Transactions using an electronic system are subject
to the rules and
regulations of the exchange(s) offering the system and/or listing the contract.
Before you engage in
transactions using an electronic system, you should carefully review the rules
and regulations of the
exchange(s) offering the system and/or listing contracts you intend to trade.
Differences Among
Electronic Trading Systems
Trading or routing
orders through electronic systems varies widely among the
different electronic
systems. You should consult the rules and regulations of the exchange offering
the electronic system
and/or listing the contract traded or order routed to understand, among other
things, in the case of
trading systems, the system’s order matching procedure, opening and closing
procedures and prices,
error trade policies, and trading limitations or requirements; and in the case
of all systems,
qualifications for access and grounds for termination and limitations on the
types of orders that may
be entered into the system. Each of these matters may present different risk
factors with respect to
trading on or using a particular system. Each system may also present risks related
to system
access, varying response times, and security. In the case of internet-based systems,
there may be
additional types of risks related to system access, varying response times and
security, as well as
risks related to service providers and the receipt and monitoring of electronic
mail.
Risks Associated
With System Failure
Trading through
an electronic trading or order routing system exposes you to
risks associated with
system or component failure. In the event of system or component failure, it
is possible that, for a
certain time period, you may not be able to enter new orders, execute existing
orders, or modify or
cancel orders that were previously entered. System or component failure may also
result in loss of
orders or order priority.
Simultaneous
Open Outcry Pit And Electronic Trading
Some contracts
offered on an electronic trading system may be traded electronically
and through
open outcry during the same trading hours. You should review the rules and regulations
of the
exchange offering the system and/or listing the contract to determine how orders
that do not
designate a particular process will be executed.
Limitation Of
Liability
Exchanges offering
an electronic trading or order routing system and/or listing
the contract may
have adopted rules to limit their liability, the liability of FCMs, and software
and communication
system vendors and the amount of damages you may collect for system failure and
delays. These
limitations of liability provisions vary among the exchanges. You should consult
the rules and
regulations of the relevant exchange(s) in order to understand these liability
limitations.
*Each exchange’s relevant rules are available upon request from the industry
professional with
whom you have an account. Some exchange’s relevant rules also are available
on the exchange’s
internet home page.
|
