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CBOE: Order Origin Code Requirements

April 27, 2012
CBOE reminds Trading Permit Holders (TPHs) of the Exchange's rules governing the requirement to record the appropriate account origin code when accepting  orders electronically, via telephone or in-person.  Since various rules of trading procedure distinguish between orders of differing origin, the correct code must be recorded on all orders at  the time of entry to insure proper execution. Current CBOE Order Origin Codes "B" for the account of a broker/dealer, including foreign broker/dealers, even though the account may clear in the customer range at OCC "C" for non-broker/dealer customer account orders "D" for non-TPH broker/dealers1 "F" for OCC clearing member firm proprietary account orders "L" for TPH affiliates, i.e.  wholly-owned  subsidiaries of  CBOE TPHs that are hedging the OTC activity of the TPH2 "M" for member market-maker orders "N" for orders in the account of a market-maker or specialist on another options exchange "W"3 for orders for the account of non-broker/dealer customer accounts who (i) place more than 390 orders in listed options per day on average during a calendar month for their own beneficial account(s) pursuant to Exchange Rule 1.1(ggg) (i.e. “Professionals”) or (ii) voluntarily have their orders categorized as broker/dealer orders for order handling, order execution and cancel fee calculation purposes pursuant to Exchange Rule 1.1(fff) (i.e. “Voluntary Professionals”) "Y" for orders in the account of a specialist registered in the underlying stock at the primary exchange for trading the stock For FLEX Options, orders for TPHs must use origin code B, F or M and orders for  non-TPHs must use origin codes D, L, N, or Y, as appropriate. A quick reference guide for properly marking orders is also attached. Please be advised that failure to obtain and record the correct account origin may constitute a violation of Exchange Rule 6.51.  Clearing members and member organizations should assure that persons receiving orders are instructed to obtain and record the appropriate origin code information.  Questions regarding this circular may be directed to the Regulatory Interpretations & Guidance team at (312) 786-8141 or reginterps@cboe.com. [CBOE RegCirc 12-57, 4/20/12]