The "quotes generator", also known as the "trading machine" is software through which a large number of orders can be sent to TASE trading systems within a short period of time, in accordance with an algorithm set in the software. This type of trading is also known as "Algorithmic Trading".
The activity of quote generators on TASE continues to grow from year to year and occupies a significant share of the total activity in the derivatives, bonds and stock market. Today approximately 2/3 of the orders currently executed on TASE are sent by quotes generators.
All quote generators will be required to meet OTR limits, see attached chapter six A >
What are the OTR rules?
TASE's OTR (Order to Trade Ratio) regulation came into effect on January 1st 2019. It specifies ratios quote generators must adhere to. The purpose of the ratios is to protect the market from abnormal activity of Quote generators, as follows:
- Order Ratio - preventing overload on the computer and communications systems of TASE and its members.
- Quantity Ratio - maintaining the integrity of trading (this ratio has not been activated yet. An announcement about activating the ratio in the future will be published )
See attached – board of directors resolutions>
Please note that the parameters are set at the securities group level or derivatives group level (as outlined in the following table) and that the vetting of a quote generator’s compliance to OTR limits is similarly conducted collectively, for all the securities of the same group,
Payment for the violation of OTR limits
TASE will demand payment from a member, should a quote generator operating through it violate an OTR limit.