Pursuant to Commission Regulation 40.6 (a)(2) and (3), the HedgeStreet Rule Committee has approved amendments to Rules 4.4(c), 5.4 and 5.5(d), in order to i) ensure full collateralization of Variable Payout Hedgelets upon trade execution; ii) employ the same process of debiting cash upon trade execution for Fixed Payout Hedgelets; and iii) remove Market Maker a) buy orders and b) sell orders to which the market maker has an offsetting transaction from the HedgeStreet Rules. The process of Subscription on Demand will still be available to Market Makers.
Said amendments require that all members have sufficient funds to satisfy their trading obligations in both Variable Payout and Fixed Payout Hedgelets upon the execution of any trade (instead of blocking cash upon order entry). As such, HedgeStreet will also be imposing a $10 Insufficient Funds Fee any time a member enters an order that is matched by another member but is rejected because he/she did not have sufficient funds to cover the transaction prior to execution.
These Rule amendments were submitted to the Commission on Wednesday, February 9, 2005.
Effectiveness will commence at the start of business on Tuesday, March 1, 2005. Click here to view the rule amendments.
Should you have any questions or require further information, please contact the Compliance Department.