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| 1. |
What are the general benefits of the Primex Auction System?
The Primex Auction System provides an automated, electronic forum for exposing orders to a broad-based crowd of participants. These crowd participants compete for the orders at prices equal to or better than the best quotes publicly displayed.
Orders exposed in the system receive opportunities for price improvement and enhanced liquidity beyond the NBBO. Participants in the system's electronic crowd benefit by being able to quickly and efficiently interact with a continuous stream of orders — without disclosing their interest to others.
The system's anonymous auction process elicits additional latent trading interest from crowd participants that is not usually displayed publicly. As a result, the system increases overall market liquidity in addition to providing opportunities for orders to receive improved executions. Importantly, this latent interest includes capital commitments provided by the system's broker/dealer participants.
Lastly, crowd participants are provided with tools so that they can anonymously predefine their interest in the system. Orders exposed to this predefined interest will have opportunities to execute immediately and at improved prices.
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| 2. |
What are the benefits of the system for broker/dealers?
As already noted, the system provides orders with opportunities to receive price improvement. This is a key component of best execution. As a result, broker/dealers may find the system useful to help facilitate best execution for their customer orders.
The system further enables market maker participants to register as Primex Auction Market Makers (PAMMs). These participants are granted additional privileges in the system, such as the ability to automatically commit capital to their own customer orders in conjunction with the exposure process. PAMMs also have the opportunity to share in the transaction revenue generated when the PAMM's customer orders execute against other participants.
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| 3. |
What are the benefits of the system for retail investors?
Retail investors, who participate via their broker, benefit by having their orders exposed to a broad audience of market participants, who may execute their order at prices and sizes that improve upon the NBBO.
In addition, retail investors benefit from their continued relationships with broker/dealers, who may commit capital to execute customer orders as part of the exposure process. Even when broker/dealers interact with their own orders, customers still benefit from any price improvement generated by the system.
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| 4. |
What is the regulatory status of the Primex Auction System?
The system operates as a facility of a sponsoring stock market, The sponsoring stock market and its officials operate the system and provide the necessary regulatory oversight.
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| 5. |
Is the Primex Auction System an electronic communications network (ECN)?
No. While the Primex Auction System is not an ECN, it complements and works in tandem with ECNs by providing opportunities for its participants to receive improved executions via the system's exposure process.
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Questions (1-5) (6-10)(11-15)(16)
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