Obligations of Market Makers
1. Pursuant to IEX Options Rule 23.150(b)(2), the initial size of Market Maker incoming quotes must be for the minimum number of contracts, which minimum number shall be at least one (1) contract. The minimum number of contracts will be determined by the Exchange on a class-by-class basis and announced to the Options Members through a circular.
2. Pursuant to IEX Options Rule 23.140(b)(4), IEX Options has defined the maximum bid/ask differential to constitute a valid two-sided Market Maker quote as $5 in all symbols listed, except for any symbols in which quote relief has been provided.
- Rule 23.140(b)(5): The bid/ask differentials stated in subparagraph (b)(4) of this Rule shall not apply to in-the-money options where the underlying security’s market is wider than the differentials set forth above. For these options, the bid/ask differential may be as wide as the quotation on the primary market of the underlying security.
3. Pursuant to IEX Options Rule 23.150(e)(2)(A), provide continuous two-sided quotations throughout the trading day in its appointed issues for 60% of the time the Exchange is open for trading in each issue, applied to all of the Registered Market Maker's appointed issues collectively, rather than on an issue-by-issue basis, and compliance is determined on a monthly basis.
Obligations of Specialists
Each Specialist must, in addition to the Obligations of Market Makers stated above, meet the following obligations:
1. Pursuant to IEX Options Rule 23.140(c), submit valid width quotes in each series not later than one minute after the dissemination of a quote or trade by the market for the underlying security.
2. Pursuant to IEX Options Rule 23.150(e)(1)(A), provide continuous two-sided quotations throughout the trading day in its appointed issues for 90% of the time the Exchange is open for trading in each issue. These obligations apply collectively across Specialist’s appointed issues, rather than on an issue-by-issue basis. Compliance with this obligation will be determined monthly.
Obligations of Directed Market Makers
Pursuant to IEX Options Rule 23.150(e)(3)(A), each Directed Market Maker must, in addition to the Obligations of Market Makers stated above, meet the following obligations:
1. Provide continuous two-sided quotations throughout the trading day in issues for which it receives Directed Orders for 90% of the time the Exchange is open for trading in each issue. These obligations will apply collectively to all series in all of the issues for which the Directed Market Maker receives Directed Orders, rather than on an issue-by-issue basis. Compliance with this obligation will be determined on a monthly basis.
IEX Options Rule 23.150.01 Supplementary Material
Note that the obligations set forth above do not apply to Market Makers with respect to adjusted option series or to series of options on cash equity securities with a time to expiration of nine months or greater.
Mandatory Systems Testing
Pursuant to IEX Options Rule 19.220, Options Members, including select Market Makers, may be designated by the Exchange to participate in systems tests. The Exchange will give Options Members reasonable notice of any mandatory systems test, which notice will specify the nature of the test and Options Members’ obligations in participating in the test.