05/23/2001
- Unlike the prior SMM program, Koch will not have any responsibilities regarding maintaining a limit order book or otherwise executing customer orders.
- Instead, during the RTH session, Koch must maintain an orderly two-sided market consisting of a current bid and offer quote for Koch's proprietary account on a RFQ basis as provided below.
- Under normal market conditions, Koch must make a two-sided market for:
(b) any consecutive four-month calendar strip during the first 12 listed contract months for 10 contracts per month at a maximum bid/ask spread of 25 points; and
(c) a minimum of 50 spread contracts at a maximum bid/ask spread of 20 points for any and all inter-month spreads involving the first 12 listed trading months.
- In abnormal market conditions (as reasonably determined by Koch in good faith) Koch must make a two-sided market for the quantities listed above but at a bid/ask spread as determined by Koch in good faith.
- During this period, Koch will not be required to make quotes but instead using reasonable discretion must make efforts under normal conditions to provide quotes.
- Under the prior SMM program, which required the SMM to maintain a limit order book of customer orders, Member Firms were required to distribute a special SMM Disclosure Statement to a customer before that customer could trade in an Exchange contract that had been designated with a SMM facility, i.e., Aluminum.
- By contrast, because Koch as the new SMM will not be handling a limit order book, the SMM Disclosure Statement will no longer be relevant, and the Exchange is discontinuing use of this disclosure statement for the new Aluminum SMM progam with Koch.