Rule Self-Certification 

November 11, 2015 

VIA ELECTRONIC PORTAL 

Christopher J. Kirkpatrick 

Office of the Secretariat 

Commodity Futures Trading Commission 

Three Lafayette Center 

1155 21st Street, N.W. 

Washington, DC 20581 

Re: Regulation §40.6 Submission Certification 

Acceptable Orders 

Reference File: SR-NFX-2015-81 

Dear Mr. Kirkpatrick: 

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended 

(“Act”), and Section 40.6(a) of the regulations promulgated by the Commodity 

Futures Trading Commission under the Act, NASDAQ Futures, Inc. (“NFX” or 

“Exchange”) amends three definitions in Chapter I to clarify the current 

definitions of “Implied Orders,” “Order” and “Quote.” Also, the Exchange 

amends Chapter IV, Section 4 to: (1) permit Iceberg Orders to be transacted as a 

Combination Order; (2) make clear which order types may currently be transacted 

as a Combination Order; and (3) make clear that only a Limit Order may generate 

an Implied Order. The amended rule text is attached as Exhibit A and will be 

implemented as of the Open Session on November 29, 2015 for trade date 

November 30, 2015. 

Chapter I, Section 1 contains definitions applicable to the NFX Rulebook. The 

Exchange is amending the definition of “Implied Order” to make clear that an 

Implied Order may only be a Limit Order and to make other grammatical changes. 

The Exchange is amending the definition of “Order” to remove an unnecessary 

sentence which already exists in the definition of a “Quote.” The Exchange is 

also correcting a typographical error in the definition of the word “Quote.” 

An Iceberg Orders is an Order where a portion of the Order is displayed and a 

portion of the Order is non-displayed. The Exchange is amending its rules to 
Commodity Futures Trading Commission 

November 11, 2015 

SR-NFX-2015-81 

Page 2 

permit Iceberg Orders to be transacted as Combination Orders in accordance with 

NFX Rules. The Exchange believes that permitting these Orders to be transacted 

as Combination Orders will offer market participants the opportunity to compete 

more effectively on NFX, by offering a similar order type as other futures 

exchanges offer today. 

The Exchange also seeks to clarify current rules to make clear that Market Orders, 

Limit Orders and Market-to-Limit Orders may be transacted as Combination 

Orders. Also, the Exchange seeks to clarify its rules to make clear that only a 

Limit Order may generate into an Implied Order. 

With respect to the designated contract market core principles (“Core Principles”) 

as set forth in the Act: 

• Availability of Contract Information. The Exchange has 

indicated within its trading Rules where specific information 

relates to a particular Contract. The Exchange provides detailed 

information within the contract specifications for that particular 

Contract. The Exchange also posts the terms and conditions of 

Exchange Contracts in its Rulebook along with trading Rules. 

• Execution of Transactions. The Exchange operates an electronic 

trading facility that provides Futures Participants with the ability to 

execute Orders within the Exchange’s Order Book and offers 

within a predetermined automated trade matching and execution 

algorithm. Orders submitted into the Trading System will be 

matched in Price-Time priority. The Exchange specifies the types 

of Orders that will be accepted by the Trading System in Chapter 

IV, Section 4. 

• Protection of market participants. Chapter III of the Exchange’s 

Rulebook contains prohibitions precluding intermediaries from 

disadvantaging their customers. These rules apply to trading in all 

Contracts. 

There were no opposing views among the Exchange’s Board of Directors, 

members or market participants. The Exchange hereby certifies that the 

amendments to Chapter I, Section 1 and Chapter IV, Section 4 comply with the 

Commodity Exchange Act and regulations thereunder. The Exchange also 

certifies that a notice of pending certification with the Commission and a copy of 

this submission have been concurrently posted on the Exchange’s website at 

http://www.nasdaqomx.com/transactions/markets/nasdaq-futures. 

 
Commodity Futures Trading Commission 

November 11, 2015 

SR-NFX-2015-81 

Page 3 

If you require any additional information regarding the submission, please contact 

Angela S. Dunn at +1 215 496 5692 or via e-mail at angela.dunn@nasdaq.com. 

Please reference SR-NFX-2015-81 in any related correspondence. 

Regards, 

Daniel R. Carrigan 

President 

cc: National Futures Association 

 The Options Clearing Corporation 

 
Commodity Futures Trading Commission 

November 11, 2015 

SR-NFX-2015-81 

Page 4 

Exhibit A 

New text is underlined and deleted text is stricken. 

NASDAQ Futures Rules 

* * * * * 

Chapter I Definitions and Governance of the Exchange

Section 1 Definitions 

Unless otherwise specifically provided in the By-Laws or Rules of the Exchange 

or the context otherwise requires, the terms defined herein shall for all purposes of 

the By-Laws and Rules of the Exchange, have the meanings therein specified. 

* * * * * 

Implied Orders. The term “Implied Orders” means a Limit Orders that are is 

automatically generated by the Trading System from a derived price. An “Implied 

Out Order” derives its price and quantity from resting Combination Strategy 

Orders and the aggregate of the respective legs which are at the best price for a 

Contract. An “Implied In Order” derives it price and quantity from the net 

differential from the best prices as between two contract months for a Contract. 

An Implied Order cannot be an FOK or IOC. 

* * * * * 

Order. The term “Order” means any bid or offer. An Order may be a Market 

Order, Limit Order, Market-to-Limit Order, Stop Order, Stop Limit Order, Iceberg 

Order, TAS Order, Combination Order, Implied Order or Linked Order. Each 

Order may include one of the following time conditions: Day; Good till Canceled 

(GTC); Good till Dated (GTD); Fill or Kill (FOK) and Immediate or Cancel 

(IOC), except Market Orders which may be FOK or IOC, Implied Orders which 

may not be FOK or IOC and a Linked Order may not be GTC or GTD. These 

Orders shall have the respective meanings set forth in Chapter IV, Section 4, as 

well as any other types of Orders that may be approved by the Exchange from 

time to time. The term Order shall also refer to a Quote, except with respect to 

Combination Orders. 

* * * * * 

Quote. The term “Quote” means a bid and/or offer. Quotes will not be not 

accepted in the Combination Order Book. A Quote may be entered as a single 

Quote or as part of a mass Quote. If Quotes are entered as a mass Quote, the 

number of one-sided or two-sided Quotes is limited to twenty-nine (29) 

Instruments. The Trading System will replace a Quote submitted by an 

Authorized Trader with any new Quote that is subsequently submitted by that 

same Authorized Trader. 
Commodity Futures Trading Commission 

November 11, 2015 

SR-NFX-2015-81 

Page 5 

* * * * * 

Chapter IV Trading System 

* * * * * 

Section 4 Acceptable Orders 

Orders entered into the Trading System for display and/or execution, as 

appropriate, are executable against marketable contra-side Orders in the Trading 

System. 

(a) Types of Orders accepted by the Trading System are as follows: 

(i) – (v) No change. 

(vi) Iceberg Order. An "Iceberg Order" is an Order where a portion of the 

Order is displayed and a portion of the Order is non-displayed. When the 

displayed quantity of the Iceberg Order is executed, a non-displayed 

portion of the remaining balance of the Order will be displayed in the 

Order Book as a new Order and will not retain its time priority. The nondisplayed portion of the Order which becomes displayed after the original 

portion is executed will be equal to the original non-displayed quantity. 

Only if the volume is reduced for an Iceberg Order will it retain its 

position in the time-priority queue. 

(vii) No change. 

(viii) Combination Orders. 

(i) Combination Orders or "Combination Strategies" will be traded in a 

separate Order Book pursuant to the Rules in Chapter IV, Section 5. 

The Combination Order Book will not accept Quotes, only Orders will 

be accepted into the Combination Order book. Combination Orders 

may be originated (adding Expiries, Contracts and trading symbols), by 

either: (i) the Exchange; or (ii) a Futures Participant or its Authorized 

Traders or Authorized Customers. Combination Orders will first 

execute against respective legs of Orders before executing against other 

Combination Orders within the Combination Order Book. Combination 

Orders shall not update the prices of the respective legs of such 

Combination Orders in their respective Order Book. The Exchange will 

disseminate Combination Orders through ITCH and FIX protocols. 

The following order types may be Combination Orders: Market Orders, 

Limit Orders, Market-to-Limit Orders and Iceberg Orders. 

(ii) and (iii) No change. 

(ix) Implied Orders. 

(i) Implied Orders will be traded in the Trading System pursuant to the 

Rules in Chapter IV, Section 5. Implied Orders will only be generated 

if those Limit Orders are at or improve the BBO of the respective legs 

at the minimum increment of the respective Contract. The Exchange 
Commodity Futures Trading Commission 

November 11, 2015 

SR-NFX-2015-81 

Page 6 

will disseminate Implied Out Orders through ITCH and FIX protocols, 

except for Inter-Commodity Spreads. Implied In Orders will not be 

disseminated. Implied Out Orders are not accepted for InterCommodity Combination Orders. 

(x) and (xi) No change. 

(b) No change. 

* * * *