The Participant Services Department, in conjunction with the Member Regulation Department, administers the application process of prospective participants, establishes trading clearing give-ups for approved participants, distributes notices of approved participants who have been assigned trading permits, and maintains a database of historical information on trading permits, voting designees, participants firms, and registration of issues for CHX registered Market Maker participants. Participants must be United States or foreign registered broker-dealers pursuant to the requirements of the Securities Exchange Act of 1934.
To become a participant, a broker-dealer must submit an application to the Participant Services Department. Assuming that all criteria are satisfied and the applicant meets applicable requirements, the Participant Services Department will issue a Trading Permit. A CHX trading permit provides access to the Exchange and its trading systems.
Types of Participants:
There are four basic types of CHX participants. Each prospective participant must obtain a Trading Permit from CHX.
- Institutional Brokers. Institutional brokers buy and sell orders on behalf of outside investors and institutions on an agency basis.
- Order-Sending Firms. These firms may (1) receive orders from their customers and route them to the Exchange for execution or (2) send orders on a proprietary basis to the Exchange.
- Market Maker Firms. CHX registered Market Makers provide added depth and liquidity to the issues they trade, making it easier for investors to buy and sell stocks
- Proprietary Trading Firms. These participant firms trade securities strictly for their own account.
General Information about Trading Permits
Each trading permit constitutes a revocable license that will allow the holder of the permit (referred to as a "participant" or "participant firm") to access the CHX's trading facilities, as well as other marketplaces.
Individuals or firms holding a CHX Trading Permit will be "members" of CHX for purposes of the Securities Exchange Act of 1934 and will be characterized as "participants" of CHX subject to CHX's regulatory jurisdiction, but they will not have any ownership interest in the Exchange or in CHX Holdings by virtue of their trading permits.
Trading permits and the application process are governed by Article 3 of the CHX Rules. No Participant Firm shall hold more than one Trading Permit. Summarized generally below are some key provisions relating to trading permits.
Applying for Trading Permits
Individuals and firms who seek to obtain a trading permit will be required to complete appropriate application documents and registration forms, satisfy regulatory requirements and pay appropriate application fees.
Please refer to Application documents for more information.
Additional Information about Trading Permits
One trading permit will be required for each firm that sends orders to the Exchange for execution.
Once issued, a trading permit will be effective for one year following its issuance date and will automatically renew for an additional one-year term on each anniversary of the issuance date. A trading permit may not be sold, leased or otherwise transferred. No person may operate as an approved lessor or otherwise lease trading access to the Exchange.
Fees and Charges
Please refer to the CHX Fee Schedule for more information.