ATS-N LIVE 0001457716 XXXXXXXX false false POSIT N Y VIRTU AMERICAS LLC 008-68193 000149823 FINRA 02/06/2009 ITGP https://www.virtu.com/about/transparency Equinix NY5 Data Center 800 Secaucus Rd Secaucus 07094 US-NJ Cyxtera NJ2 Datacenter 300 John F. Kennedy Blvd E. Weehawken 07086 US-NJ false false Virtu Americas, LLC operates POSIT and other business units that can enter or direct the entry of orders to POSIT or result in an order being entered or directed to POSIT. The Firm's business units each use one or more technology platforms that have MPIDs associated with the platform. A single business unit can enter or direct orders to the ATS through more than one technology platform and consequently under more than one MPID. These business units are described below. Virtu Electronic Trading ("VET"). VET provides algorithms that are used by clients and the Firm's business units. VET algorithms enter or direct the entry of orders to POSIT as agent when those orders are entered by clients into the algorithms or as principal or riskless principal when one of the other business units enters orders into the algorithms using the MPIDs: DTTX, GFLO, VALR, VALX, ITGI and ALTX. Virtu Client Market Making ("VCMM"). VCMM handles held and not held orders transmitted by other broker-dealers and held orders transmitted by institutions. The majority of these orders are SEC Rule 605 eligible orders and are handled and executed on a fully automated basis. VCMM sales and trading personnel handle larger and less liquid orders manually and can use VET algorithms in connection with their market making activities. VCMM enters or directs the entry of orders to POSIT as principal, riskless principal and agent to acquire inventory to fill orders or to acquire positions for its own account using the following MPIDs: NITE, GFLO, VALR and VALX. Virtu Institutional Trading ("Institutional Trading"). Institutional Trading handles not held orders transmitted by institutional clients and facilitates block transactions in single stocks. Institutional Trading uses VET algorithms to enter or direct the entry of orders as principal or riskless principal in connection with its client facilitation activities using the following MPIDs: NITE, GFLO, VALX and ITGI. Virtu Hi-Touch Portfolio Trading: Traders on this desk handle not held orders in baskets of stocks and ETFs. Traders can enter or direct the entry of orders through VAL Electronic Systems into the ATS as agent under the MPID ITGI. Virtu ETF Trading ("ETF Trading"). ETF Trading makes markets on exchanges and facilitates block transactions in exchange traded products for broker-dealer and institutional clients. ETF Trading uses VET algorithms to enter or direct the entry of orders as principal or riskless principal in ETFs and singles stocks using the MPID VALX. Virtu Principal Market Making ("VPMM"). VPMM is a market maker in NMS equity securities. VPMM enters or directs the entry of orders as principal to POSIT utilizing the MPID VIRT. Y N N VAL's Canadian, EU and Asia Pacific Affiliates are broker-dealers that offer products and services similar to VET and have hi-touch desks, all of which can enter or direct the entry of orders to POSIT through VAL. VAL enters or directs orders to the ATS for these Affiliates as agent or riskless principal using the VAL MPIDs GFLO, VALR, VALX or ITGI. VAL provides Subscribers in the U.S. with a FIX gateway to enter orders into POSIT using FIX protocols 4, 4.2 and 4.4. The FIX gateway communicates with POSIT in a binary format. VAL provides its Canadian Affiliate with a binary gateway to enter orders into POSIT. Subscribers in Canada direct orders to the Canadian Affiliate via FIX. See, Part III, Item 5(a). N N VAL offers Subscribers the ability to opt out of interacting with principal orders entered into POSIT under the MPIDs NITE, VIRT and VALX ("the Principal Opt-Out"). Orders entered into POSIT by VAL under the MPIDs DTTX, GFLO, VALR and ALTX are not subject to the Principal Opt-Out. Subscribers can request the Principal Opt-Out through their sales persons. Following receipt of a request, the sales person will enter a ticket to make the request. Thereafter, an entry is made in a configuration file which will take effect in most cases on the next business day, but could take effect either the same day or greater than the next business day, depending upon the time of day the request is submitted. When the POSIT matching logic is applied, the configuration file is checked to determine whether orders are eligible for crossing with VAL or its Affiliate's principal orders entered under the above referenced MPIDs. VAL does not allow POSIT Subscribers to opt out of interacting with any orders submitted to POSIT by VAL or its Affiliates when they are submitted under any of the other MPIDs referenced in Part II, Item 2(a). The Principal Opt-Out configuration is applied for all crossing sessions. N Y VAL and the Trading Centers listed below have each entered into electronic access arrangements with one another which permit each to effect transactions on their respective trading centers: BAML Instinct X, Barclays LX, CBOE Bats Y, CBOE Bats X, CBOE Direct Edge A, CBOE Direct Edge X, Citadel Securities - Citadel Connect, Citi Bloc, Credit Suisse Crossfinder, Deutsche Bank SuperX, Fidelity CrossStream, Goldman Sachs SigmaX2, Instinet BlockCross, Instinet CBX, Jane Street JX, JP Morgan JPM-X, Liquidnet H2O, Two Sigma Securities, UBS ATS, and Virtu MatchIt. These arrangements do not provide for preferential access or require either party to route any orders. N VAL offers its clients a number of products and services for the purpose of effecting transactions, including transactions in POSIT. Subscribers who can directly enter or direct the entry of orders into POSIT and choose the order types and instructions they use are "Direct Subscribers". Subscribers that use algorithms or other electronic systems that choose whether and when to enter or direct the entry of orders into POSIT and which order types and instructions to use are "Indirect Subscribers". Subscribers can be both Direct and Indirect Subscribers. 1. VAL offers a FIX Application Programming Interface ("API") that allows Subscribers directly enter orders into POSIT. See Part III, Item 5(a). 2. VAL offers EMSs called Triton, Triton Black, and Triton Valor (collectively "Triton") which allows its users to view market data and enter or direct the entry of orders to market centers, including POSIT. See, Part III, Item 5(c). 3. VAL offers algorithms and smart order routers which allow clients to indirectly enter or direct the entry of orders to market centers, including POSIT. See Part III, Item 5(c). Certain means of order entry are only available to certain Subscribers, as discussed at Part III, Items 5(a) and (d). Specifically, FIX protocols, as described in Part II, Item 5, are available to U.S.-based Subscribers and VAL provides its Canadian Affiliate with a binary gateway to enter orders into POSIT. See, Part II, Item 2(b) and Part III, Item 5(a). VAL's agency desks and clients of its Affiliates cannot use the GUI to view and interact with Conditional interests. Rather, they send orders to algorithms that can send conditional orders through Alert. The Firm's Affiliates operate business units that offer products and services, including trading desks and algorithms, that result in the orders of Indirect Subscribers being entered on POSIT. See Part II, Item 2 for a description of these Affiliates. Y VAL does not have any personnel whose sole responsibility is for POSIT. The Firm considers information relating to Subscriber's live orders, trading interests and recent executions in POSIT that the Firm reasonably believes may suggest a Subscriber continues at that moment in time to have the same or additional live orders and trading interests in POSIT, to be ATS confidential information ("Confidential Information"). As is more fully discussed in Part III, Item 7(a), VAL does not consider all post trade data to be Confidential Information, particularly when the information is anonymized, aggregated or both. Below is a summary of the shared personnel that provide services to both POSIT, VAL, and its Affiliates and have access to Confidential Information. * Compliance and Legal: Compliance and Legal personnel support all of the Firm's business units and those of the Firm's Affiliates and perform a variety of compliance and legal activities related to their roles. They have access to Subscriber historical order and execution information and as necessary they can be provided with access to intra-day information. * Finance and Management Reporting Group: Finance and management reporting personnel support all of the Firm's business units and those of the Firm's Affiliates. These personnel are involved in accounting, billing, analyzing revenues, and providing management reporting information. They have access to Subscribers' historical post- trade execution information and data. * Operations: Operations personnel support the Firm's middle and back office processes for clearance and settlement and related activities and have access to Subscribers' real time intra-day, post-trade, and historical execution information for clearing, settlement, and regulatory reporting purposes. * Core Operations: Core Operations are technical personnel who have access to the Firm's and its Affiliates' trading infrastructure, which includes POSIT, to monitor the functionality, health, and wellness of the Firm's trading infrastructure and take action as necessary to maintain the systems and manage issues. They have access to Subscribers' real-time and historical order and execution information. This group supports all trading infrastructure and applications for the Firm. * Software Developers: Software Developers have access to the Firm's and its Affiliates' trading infrastructure, which includes POSIT, to maintain and enhance the software for the Firm's trading applications. They have access to Subscribers' real-time and historical order and execution information. This group supports all trading infrastructure and applications for the Firm. * Product Management: Product Management are personnel who manage the day-to-day business activities for products such as POSIT, the algorithms the Firm provides to clients, and other trading-related applications VAL and its Affiliates provide to clients. These personnel monitor the trading applications, enhance their product features, and create new features. Product Management compile and analyze statistics and metrics related to the ATS and other electronic products and services. Product Management works with Software Developers, and in some instances are also Software Developers themselves. The Product Manager responsible for supervising POSIT is also the Product Manager responsible for supervising VAL's other ATS, MatchIt, and also provides support to both VAL's Affiliates' execution services applications. Product Management have access to Subscribers' real-time and historical order and execution information. * Relationship Management: Relationship Management personnel are responsible for managing the Firm's relationship with its clients, including clients who are Direct Subscribers of the ATS, and for cross-selling the Firm's other products and services. They have access to historical order and execution information. * Sales and/or Trading personnel: To the extent Sales or Trading personnel are responsible for handling an order, a portion of which is directed to POSIT as a child order, such personnel would have real time access to such child order and any of its executions in POSIT analogous to the access they would have to information about orders and executions that were directed to external market centers in order to monitor executions and provide order-related services. * POSIT Alert ("Alert") Sales and Coverage: The Firm offers an application called Alert that is a conditional order application which resides outside of the POSIT Matching engine and which transmit orders to the Alert Crossing Session to consummate trades. See Part III, Item 9 and 11 for further descriptions of Alert and the Alert Crossing Session. Alert Sales and Coverage personnel are responsible for the sales and day-to-day coverage of Alert. Alert Sales and Coverage personnel have access to a front end application called Phoenix, which displays real-time order and execution information of Alert participants. See, Part III, Item 9 for further discussion about Alert. This group can access Alert participants' real-time and historical order and execution information, but do not have access to any real-time or historical order and execution information in POSIT's matching engines for the Continuous Crossing Session or the Agency Close Crossing Session. * Analytics Personnel: Analytics Personnel provide transaction cost analysis data and consultancy to institutional investors. This group is separate from the business units of the broker dealer operator that enter or direct the entry of orders and trading interest into POSIT, as defined in Part II, Item 1(a). The Firm offers a product called the Analytics Portal ("the Portal") that provides pre-trade, real-time and post-trade analytics to the Firm's clients. In order to enable and support client trade reporting in the Portal, Analytics personnel have access to real-time order and execution information for Alert participants. This group can access Alert participants' real-time and historical order and execution information, but do not have access to any real-time or historical order and execution information in POSIT's matching engines for the Continuous Crossing Session or the Agency Close Crossing Session. See Part III, Item 9 for further discussion about Alert. POSIT is hosted in the Equinix NY5 Data Center in Secaucus, N.J. Cross-connections to POSIT in NY5 are available by request to Subscribers accessing POSIT directly. POSIT's backup servers are hosted in the Cyxtera NJ2 Datacenter, located in Weehawken, N.J. The Data Centers provide services that include, building security; air conditioning; access to electricity and telecommunication services; and cages for computer equipment. The Firm owns and maintains its own computer hardware and network devices within the data center. Please see Part III, Item 6 for more detail. N GENERAL BACKGROUND AND SCOPE OF CONFIDENTIAL INFORMATION. The Firm operates POSIT on a matching engine that runs on a standalone server in the NY5 Data Center. See Part I, Item 7; and Part III, Item 6(a). The POSIT matching engine communicates with shared systems to book trades, to report executed trades to the tape, to facilitate clearance and settlement, for financial reporting and billing, and to facilitate other post-trade processes. The Firm operates the Alert application on servers that are separate from the POSIT matching engine. These systems contain Confidential Information. See Part II, Item 6 for information on personnel that have access to Confidential Information. AGGREGATED ANONYMOUS DATA. Data which has been aggregated and which does not identify any Subscribers is not Confidential Information ("Aggregated Anonymous Data"). The Firm publishes firm-wide aggregated anonymous execution data to market wide trade advertisement systems after the transaction has been reported to the consolidated tape. The data does not include any client identities but does include symbol level executed volumes. The Firm includes POSIT Aggregated Anonymous Data in these reports at the end of day. The POSIT Aggregated Anonymous data is combined with the rest of the Firm's data when it is disseminated to these market-wide systems and is not separately identified or attributed to POSIT. While the Firm does not consider this data to be Confidential Information, it nonetheless permits Subscribers to opt out of having their data included in these reports. The Firm posts monthly statistics on its website and disseminates this data to Subscribers ("the Monthly POSIT and Alert Statistics"). The Monthly POSIT and Alert Statistics are available at https://www.virtu.com/about/transparency and provide aggregate and anonymous information about POSIT and Alert, including total volume; volume by sector; volume by market cap; fill size distribution; distribution of Alert block size, and distribution of executions at the bid, mid and offer. The Firm produces market commentary from time-to-time that discusses general market trends. The statistical data described in this paragraph can be used to produce market commentary. The Firm considers this data to be Aggregated Anonymous Data and not Confidential Information. The Firm does not permit Subscribers to opt out of having their data included in these reports. SALES DATA. Sales Data is aggregated information about the products and services the Firm's clients use and includes the client's name, the product or service they use, aggregate executed volume, and revenues ("Sales Data"). Sales Data includes aggregated ATS data as described in the preceding sentence. The Firm provides Sales Data to management personnel, Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel who are involved in handling relationships with the Firm's clients. Sales Data is provided for the purpose of allowing these personnel to keep abreast of the client's business activities to manage the client relationship and to cross sell the Firm's products and services to the client. The Firm does not consider Sales Data to be Confidential Information when distributed internally for the above described purposes. The Firm makes this information available in end of day reports and in sales systems (i.e., systems that support activities of Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel for the purposes described above) on T+1. The Firm prohibits personnel from disclosing Sales Data to third parties. The Firm does not permit Subscribers to opt out of having this data made available to personnel involved handling client relationships, as defined in Part II, Item 6(a). PERSONNEL WITH ACCESS TO CONFIDENTIAL INFORMATION. The Firm does not have any personnel whose sole responsibility is for the operations of POSIT. The shared personnel discussed in response to Part II, Item 6(a), have access to Confidential Information. SAFEGUARDS AND OVERSEEING CONFIDENTIAL INFORMATION. The Firm maintains written policies and procedures regarding use and protection of Confidential Information. Firm personnel are subject to its parent, Virtu Financial Inc.'s Code of Conduct and Employee Manual. Firm personnel are also subject to the Firm's Information Security Policy, Compliance Manual, and Written Supervisory Procedures. These policies prohibit the personnel listed in Part II, Item 6(a), from sharing Confidential Information with other personnel who are not in one of these permitted categories or with any other person. The exception is that Compliance and Legal personnel may provide information to regulators in response to regulatory requests or to third parties pursuant to subpoena. Personnel who violate the Firm's policies concerning Confidential Information are subject to discipline, including termination of their employment. The Firm performs email reviews and employs data loss software as a means of safeguarding Confidential Information. The Firm procedures require that personnel make requests for access to its systems through the Firm's access ticketing system and to receive approval from a supervisor prior to being granted access to any systems. The Firm's supervisory personnel grant access to systems on the premise that it is necessary to perform their duties and to carry out the purpose for which the information is provided to them. The supervisor responsible for POSIT and Alert approves requests for access to the POSIT matching engine and Alert application. The Firm only permits approved personnel in the categories described in Part II, Item 6(a), to have access to Confidential Information and only permits these personnel to access the systems and the Confidential Information contained therein using approved means of access and credentials. Supervisors do not grant access to Confidential Information. The Firm maintains a process that sends notifications to designated personnel to disable systems access for personnel who are no longer employed by the Firm. Supervisors are responsible for instructing the technology personnel to disable access when employees change roles. The Firm provides reports to the supervisors that show personnel with access to the POSIT matching engine and Alert application on a monthly basis. Supervisors review these reports to ensure that these personnel still require access to carry out responsibilities related to the ATS. PERSONAL TRADING RESTRICTIONS. The Firm maintains employee trading policies that require personnel to disclose their own personal accounts and the accounts of close family members, that prohibit personnel from trading based on any client Confidential Information, that require personnel to pre-clear transactions and attest at the time of trade entry that they are not trading on Confidential Information, and that prescribe holding periods for securities purchases. The Firm conducts reviews of employee trading to determine whether trades were pre-cleared and whether holding periods were observed. By virtue of their use of POSIT, VAL considers all Subscribers to have consented to the disclosure of Confidential Information as described in Part II, Item 6(a) and consented to the disclosure of Aggregated Anonymous Data to the public and Sales Data to management personnel, Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel internally as described in Part II, Item 7(a) above. Subscribers may consent to disclosure of their own Confidential Information to any person they choose by submitting a written request to their Sales or Trading person, Relationship Management person or Alert Sales and Coverage person describing the nature of the information the wish to disclose and the scope of the disclosure they wish to make. For example, a Subscriber may wish to request that their data be disclosed to a Sales or Trading person to monitor their activity or for analysis. To the extent a Subscriber has made a request to disclose Confidential Information that is ongoing, See Part II, Item 7(b), or wishes to opt out of the disclosure of Aggregated Anonymous Data that is reported market-wide dissemination systems, See Part II, Item 7(a), the subscriber may submit a written request to their sales person. The sales person will create a ticket for operation staff to carry out the request. In most cases, the request will be honored on the next business day, but could take effect either the same day or greater than the next business day, depending upon the time of day the request is submitted. Sales and Operations will verify that the request has been implemented. Otherwise, VAL does not permit Subscribers to opt out of having their Aggregated Anonymous Data included in the Monthly POSIT and Alert Statistics, in market commentary that uses this data, or from having Sales Data provided to management personnel, Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel, for the purposes noted in Part II, Item 6(a). The shared personnel described in response to Part II, Item 6(a) have access to Confidential Information, as described in Part II, Item 6(a). These personnel have access to that information for the purpose of carrying out their job functions. To the extent Sales and Trading Personnel direct orders to the ATS, those orders and related executions are available to Sales and Trading Personnel who may analyze the data for the purposes of understanding the performance of the algorithms. As described in Part II, Item 7(a), the Firm makes public Aggregated Anonymous Data to further the Firm's efforts to market its products and services. The Firm does not consider Aggregated Anonymous Data to be Confidential Information. The Firm provides Sales Data to management personnel, Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel so that they may keep abreast of their clients' activities and coordinate the Firm's sales efforts. The Firm does not make this information available to third parties. The Firm does not consider Sales Data to be Confidential Information when it is provided to management personnel, Sales or Trading personnel, Relationship Management personnel and Alert Sales and Coverage personnel or these purposes. Investment Companies Brokers Asset Managers Principal Trading Firms Hedge Funds Market Makers Dealers N The Firm permits applicants who satisfy certain eligibility requirements to become Direct Subscribers. Direct Subscribers must be institutional investors or broker dealers. Additionally, Direct Subscribers must execute an electronic access agreement, and submit the standard on- boarding documentation that all clients of the Firm must submit. Such documentation includes "know your customer" information, financial information to assess counterparty risk and establish a trading limit, and relevant agreements such as Agreements to Give Up ("AGU") or Qualified Service Representative Agreements ("QSR") to facilitate trade clearance. The Firm performs reviews to assess a client's prior disciplinary history. A disciplinary history related to market abuse, for example, would potentially preclude a prospective client from being on- boarded to VAL and consequently would preclude the client from being permitted access to the ATS. The Firm evaluates factors such as an institutional investor's assets and assets under management, a broker-dealer's net capital and its clearing firm's net capital to the extent a broker-dealer is not self-clearing, and credit ratings in making on-boarding determinations. Institutions must meet the FINRA definition of Institutional Investor. For Broker-Dealers the Firm doesn't have a specific net capital requirement, but will consider the nature of the business flow, whether there will be large mark-to-market exposures, anticipated revenues provide sufficient risk vs. reward ratios, whether the Subscriber is part of a larger group and there are explicit or implicit guarantees. For non-Broker-Dealers that do not meet one of the criteria to be defined as an Institutional Investor, exceptions may be granted is there is a degree of confidence the company will grow and meet the definition of institutional investor in the future. The Product Manager for the ATS approves or denies access to the ATS. Clients who are not approved for access to the ATS would generally also not be approved for any other VAL services. The Firm requires Indirect Subscribers to go through the same on-boarding process. The Firm only on-boards clients who use its EMS, algorithms, and Alert that are broker-dealers or institutional type clients and does not accept natural persons as clients. Y N Subscribers may be excluded as a result of regulatory or counterparty risk concerns which would result in the Subscriber being excluded from all services provided by the broker-dealer operator of the ATS. The same criteria listed in Part III, Item 2 which would preclude a prospective client from becoming a client of VAL and being granted access to the ATS could also result in an existing Subscriber from being excluded from access to the ATS and from other services provided by VAL. For example, a disciplinary history related to market abuse or a change in financial condition such that the Subscriber fails to satisfy VAL's counter-party risk criteria could preclude a Subscriber from continued access to the ATS. Additionally, a subscriber can be temporarily blocked intraday for a given symbol in the POSIT Alert Crossing Session, which is described in Part III, Item 14a. Y POSIT accepts orders beginning at 8:00 a.m. EST. POSIT executes orders from 9:30 a.m. to 4:00 p.m. EST, Monday through Friday, except for during United States equity market holidays and early market close times. These same hours apply to Alert as well, with the exception that Alert does not begin accepting Conditional Orders until 9:30 a.m. EST. Y All Subscribers enter or direct the entry of orders to POSIT through FIX APIs provided by the Firm or its Affiliates. VAL provides Direct Subscribers in the U.S. with a FIX API to enter orders into POSIT using FIX protocols 4, 4.2 and 4.4. The FIX API communicates with POSIT in a binary format. VAL provides its Canadian Affiliate with a binary gateway to enter orders into POSIT. Indirect subscribers in Canada direct orders to the Canadian Affiliate via FIX. VAL provides a FIX specification document for both POSIT and Alert describing the transmission formats for order messages. Y VAL provides its clients with Triton EMS, algorithms, smart order routers and Alert which can enter or indirectly cause the entry of orders to POSIT. The Firm's Affiliates provide algorithms that are used by clients and the Firm's business units that enter or direct the entry of orders to POSIT and orders and conditional interests to Alert. The conditions described in Part III, Item 2 are the only conditions for entering orders through the algorithms provided by VAL and its affiliates. Specifically, Subscribers must execute an electronic access agreement, and submit standard on-boarding documentation that all clients must submit, including know your customer information, financial information to assess counterparty risk and establish a trading limit, and relevant agreements information to facilitate trade clearance and settlement, and be approved as a client of VAL or its Affiliates. Y POSIT is hosted in Equinix NY5 Data Center in Secaucus, NJ with a backup location at Cyxtera NJ2 Datacenter in Weehawken, NJ. All VAL network and system equipment is kept in VAL's cage, which is owned and operated by VAL. VAL does not permit Subscribers to co-locate within VAL's cage. VAL offers cross connects in Equinix NY5 and NJ2 Datacenters to all Direct Subscribers who wish to connect directly to POSIT via cross connect. Clients can also leverage extranet connectivity providers in order to connect to POSIT. Connectivity via Internet is also available. Connecting via Internet/Extranet vs directly via cross connect could affect the speed of client orders in reaching POSIT. Direct Subscribers connecting to POSIT via direct cross connection would reach the POSIT matching system faster than a Direct Subscribers connecting via an Internet/Extranet connection. Direct connectivity to POSIT via cross connections are available by request, which are made to Equinix in NY5 or Cyxtera in NJ2. VAL will provide the required Letter-of-Authorization. Datacenter vendors (Equinix, Cyxtera) may charge a fee for the cross connect. VAL supports 1 Gigabit (multi-mode fiber/single-mode fiber) and 10 Gigabit (single- mode fiber) connections. Direct Subscriber cross-connects terminate on VAL owned and managed network switches. All of the equipment in the cabinets hosting POSIT infrastructure is solely owned and managed by VAL. Y N N Continuous Crossing Session POSIT accepts Peg orders and Immediate or Cancel ("IOC") orders. Peg orders may execute against contra-side Peg orders or against IOC orders. IOC orders may only execute against contra-side Peg orders. These order types may be entered with other instructions, as described below, that will be used by the matching algorithm to determine whether and how they will interact with other orders. (1) Peg Orders: Peg orders remain open until executed, canceled by the Subscriber or until the end of the daily matching session. Peg orders can be designated with the following execution instruction: (i) Market: A Market instruction designates that a buy order can be executed up to the national best offer and a sell order can be executed down to the national best bid. (ii) Mid-Point: A Mid-Point instruction designates that an order can be executed up to the mid-point between the national best bid and national best offer ("NBBO"). (iii) Primary: A Primary instruction designates that the order can only be executed at the national best bid in the case of a buy order and the national best offer in the case of a sell order. (iv.) Limit Price: A Limit Price instruction specifies a price above which a buy order and below which a sell order that the order will not be eligible for execution. (2) IOC Orders: IOC orders will either execute if an eligible contra side order exists against which the order can be executed or if not the order is canceled. Subscribers may enter IOC orders with Market, Mid-Point and Limit Price instructions. Subscribers can include Minimum Execution Quantity ("MEQ") instructions on their orders via FIX, which specifies the minimum number of shares that must be available for a contra side order to be eligible for execution. Subscribers can also request to apply the following instructions on their orders at the session level: (i) Locked Market: Direct and Indirect Subscribers may request a Locked Market instruction, which specifies that an order is not eligible for execution during locked markets. IOC orders entered with a Locked Market instruction will be rejected if the NBBO is locked. Peg orders will be accepted but ineligible for execution until the NBBO unlocks. (ii) Virtu Principal Opt-Out: Direct and Indirect Subscribers may request to have their orders not interact with Virtu principal. This instruction will only prevent interaction against orders entered by VAL under the MPID's NITE, VIRT and VALX. Principal orders entered by VAL or the Affiliates using other MPIDs will not be subject to this opt out. See Part 2, Item 3b for more detail. (iii) MEQ Instruction Non-Aggregation: Direct and Indirect Subscribers may request that multiple orders are not aggregated to meet a MEQ instruction. By default, POSIT will aggregate orders to meet a Subscriber's MEQ instruction. (iv) Cancel Residual if Below MEQ Instruction: Direct and Indirect Subscribers may request that a residual quantity be canceled back to the Subscriber if the residual quantity is less than the Subscriber's MEQ instruction. By default, POSIT will not cancel back an order if the residual is less than the MEQ instruction. (v) Default Peg Instructions: Direct and Indirect Subscribers may request that their IOC and/or Day orders have a Default Peg instruction. An order that contains a value in a utilized FIX field other than a value recognized by VAL (as described in its FIX specifications) will be rejected. An order containing a value in a non- utilized FIX field will be accepted, but that instruction will not be processed. Subscribers can route orders to the Agency Close Crossing Session, which are subject to specific time-in-force and order type attributes, as described in Part III, Item 17. For resting Peg orders, priority in POSIT is based on the price instruction, i.e. market, mid, or primary. Resting Peg orders that can be executed at the same price receive a pro rata share allocation. However, POSIT will always attempt to execute at the midpoint of the NBBO, prior to executing at the NBB or NBO. Resting Peg orders with market instructions on the same side of the market will execute at the midpoint in a pro rata share allocation along with resting Peg orders with midpoint instructions also on the same side of the market. Peg orders with primary instructions, cannot execute at the midpoint, and would not participate and receive shares in a pro rata allocation when there are resting Peg orders with market and or midpoint price instructions on the same side. For IOC orders and Peg orders that remove liquidity, these orders are processed one at a time in time sequence. The following examples illustrate the matching process, assuming there are no instructions that would prevent an execution such as MEQ or a Limit Price that would be an order ineligible based upon the current NBBO. Example 1: Market bid/offer: $10.00 x $10.10 In POSIT, Order 1 is a Midpoint Peg order to buy 1,000 shares and Order 2 is a Market Peg order to buy 1,000 shares. An in-bound Peg order or IOC order with market or midpoint instructions to sell 1,000 shares is entered into POSIT. An execution of 1000 shares will occur at midpoint, with Order 1 receiving 500 shares, and Order 2 receiving 500 shares. Example 2: Market bid/offer: $10.00 x $10.10 In POSIT, Order 1 is a Midpoint Peg order to buy 1,000 shares and Order 2 is a Primary Peg order to buy 1,000 shares. An in-bound Peg order or IOC order with market or midpoint instructions to sell 1,000 shares is entered into POSIT. An execution of 1000 shares will occur at midpoint of the NBBO, with Order 1 receiving 1000 shares and Order 2 receiving no shares. Alert Crossing Session The Alert Crossing Session supports all of the order types and instructions described in the Continuous Crossing Session section in Part III, Item 7(a), with the exception that the Alert Crossing Session does not accept IOC orders. Additionally, the below order type instructions are only available in the Alert Crossing Session. (i) Conditional Indicator: Peg orders entered into the Alert Crossing Session are by default designated as Conditional Orders. Conditional Orders are not firm and must respond affirmatively to an Invitation to Firm-Up from the Alert Crossing Session by transmitting a Firm-Up Response Order to be eligible to be executed against contra-side orders. (ii) Firm-Up Response Order: These orders are entered in response to invitations from the Alert Crossing Session. (iii) Auto-Ex: Human Participants, as described in Part III, Item 9(a), can designate a Conditional Order as Auto-Ex. If the Auto-Ex instruction is enabled for a Conditional Order, the Human Participant will not receive a pop up window requesting to Firm-Up, as described in Part III, Item 9(a), but instead the Conditional Order from the Human Participant will automatically Firm-Up against a contra side order. See Part III, Item 9a for more detail on the Alert Crossing Session. Agency Close Crossing Session For the Agency Close Crossing session, Subscribers can only submit Peg orders with a Market Peg instruction and a time in force of close. See Part III, Item 11(c) for more detail on the Agency Close Crossing Session. Y The minimum size for an order is 100 shares. Any odd-lot order will be canceled. Y N POSIT accepts mixed-lot orders, but only round lot portions of the orders will be eligible for trading, and the odd lot remainder is canceled. Y VAL offers a conditional messaging system known as Alert. Alert is an anonymous Conditional Order matching application that exists outside of the POSIT matching engine. Alert has two types of participants: Human Participants and Electronic Participants. Alert has three message types: A Conditional Order; an Invitation to Firm-Up; and a Firm-Up Response Order. Human Participants install Alert software, which can be installed on a variety of OMS or EMS systems, on their systems. The Alert software takes in information about Human Participants orders resident in the OMS or EMS and transmits that information to the Alert matching application in the form of a Conditional Order. Alert Human Participants configure the frequency at which the Alert software takes in information about orders resident in their OMS or EMS. The Alert software also provides Alert participants with a graphical user interface ("the Alert Front End") that allows users to see pending Conditional Orders and respond to Invitations to Firm-Up. Human Participants can manually respond to Firm-Up Requests or configure the Alert software to automatically respond. For Human Participants, Alert will send the Invitation to Firm-Up to the Alert Front End via a pop up window, requesting the Human Participant to Firm-Up. The pop up window indicates that a contra order exists in a given symbol, but does not provide any size or price information of the contra order. For an execution to occur, the Human Participant must respond to the pop-up window by submitting a Firm-Up Response. The one exception to this workflow is for Human Participants who have enabled Auto-Ex on their order, which is described in Part III, Item 7a. The Auto-Ex order instruction can only be set by the Human Participant in the Alert software. The Auto-Ex instruction will remain in effect until one of the following occurs: 1. The Huma Participant turns off Auto-Ex on the order, 2. The Human Participant is fully filled on the Auto-Ex order, 3. The trading day ends. The Alert software will the send a Firm-Up Response Order from the Human Participant's EMS to VAL for submission to the POSIT ATS Alert Crossing Session that references the invitation and matches the attributes of the invitation in terms of symbol, side and quantity. Human Participants can change order quantities up or down prior to submitting a Firm-Up Response. VAL's agency desks and clients of its Affiliates cannot use the Alert Front End to view and interact with conditional interests. They are Electronic Participants and can only send orders to algorithms that can send Conditional Orders through Alert. Electronic Participants do not install Alert software. Rather, Electronic Participants transmit Conditional Orders directly to the Alert matching application through the Electronic Participant's algorithm or electronic system. Alert will send an Invitation to Firm-Up to the algorithm or system that entered a Conditional Order when a potential matching opportunity exists. Hereinafter, Electronic Participant and algorithm or system shall have the same meaning. For an execution to occur, the Electronic Participant must respond to the invitation by transmitting a Firm-Up Response Order. Alert will transmit an Invitation to Firm-Up to the Electronic Participant containing the same number of shares included in the Electronic Participant's original Conditional Order. The Electronic Participant may then respond by sending a Firm-Up Response Order to VAL for submission to the POSIT ATS Alert Crossing Session that references the invitation and matches the attributes of the invitation in terms of symbol, side and quantity. The Electronic Participant may transmit a Firm-Up Response Order with a quantity that is less or more than the invited quantity. An execution will occur to the extent that Firm-Up Response Orders are received by POSIT within the designated response time, subject to other instructions placed on the orders by the participant, as described in Part III item 7. All business units and affiliates of the broker dealer operator that enter or direct the entry of orders into POSIT ALERT are considered Electronic Participants, and are not treated any differently than Electronic Participants external to the broker dealer operator. When multiple Conditional Orders are present on the same side and same symbol, the Alert matching application will give invitation priority in the following order: Human Participant with Auto-Ex enabled, Human Participant without Auto-Ex enabled, Electronic Participant. When two participants are on the same side and fall within the same participant type (i.e., two Human Participants with Auto-Ex enabled, two Human Participants without Auto-Ex enabled, or two Electronic Participants), the Alert matching application will use order size as the second order of invitation priority. For example, if two Human Participants are present on the same side and same symbol, and a single contra order is submitted, the Human Participant with the largest order size will receive an invitation message. Lastly, if two participants are on the same side, fall within the same participant type, and have the same order size, order submission time will be used as the third order of priority to determine which participant would receive the invitation. The response time to the Invitation to Firm-Up is a function of the type of participants invited. Electronic Participants must respond within 2 seconds, while Human Participants without Auto- Ex enabled have 30 seconds to respond. Participants who do not respond within these time frames will not be eligible to participate in the match. Alert invites all participants in the potential match simultaneously, except as described below. When an Electronic Participant has a potential match against a Human Participant, the Human Participant will receive the Invitation to Firm-Up first. Once the Human Participant firms up, an Invitation to Firm-Up is then sent to the Electronic Participant. If the Human Participant does not firm up, the Electronic Participant will not receive an Invitation to Firm-Up. The one exception to this invite sequence is in regards to VAL algorithms. VAL algorithms receive an invite message at the same time a Human Participant receives an invite message. In addition to the messaging described above to Alert participants, Alert will transmit information to POSIT on the potential Alert match. At the time Invitations to Firm-Up are sent to participants, Alert sends the following information to POSIT on the potential Alert match: 1) Number of buyers, 2) Number of sellers, 3) Number of Human Participants, 4) Symbol, 5) Response timer. POSIT will run the match at the earlier of when all participants submit firm up orders to POSIT or the expiration of the response timer. After the completion of the match, or the expiration of the response timer, POSIT will transmit information on the outcome of the match back to Alert. This information is stored to log files that are consumed by a front end application called Phoenix. Phoenix is used by Alert Sales and Coverage personnel to monitor client orders in Alert, as described in Part II, Item 6a. Upon request, POSIT will apply a maximum notional value constraint, set by the Alert participant, to an Alert participant's order. In addition, upon request, POSIT will aggregate an Alert participant's orders for execution. Where such Alert orders have a common MEQ instruction, POSIT will apply the MEQ instruction on the aggregated Alert order. Y POSIT begins accepting all order types at 8:00 AM EST, while Alert begins accepting Conditional Orders at 9:30 AM EST. POSIT does not execute orders before the U.S. market's open, after the U.S. market's close, and during a trading halt. There are no limitations on the types of orders POSIT will accept prior to the start of regular trading hours or during a trading halt; however, IOC orders will be cancelled back and Peg orders will remain on the POSIT order book until trading begins. Unexecuted orders will be cancelled at the market's closing time. POSIT does not have an opening auction or any specific procedures to reopen after a halt of trading. Peg orders will remain on the book during a trading halt, and be prioritized by price, pro rata shares, as described in Part III, Item 7(a), subject to the instructions placed on an order by a Subscriber. POSIT will not begin trading after the market's open or after a trading halt in a given security until one of the following occur: (1) a trade occurs on the primary market whose size is at least a round lot, or (2) a bid and offer for the security has been posted on the primary market. A Subscriber can request to not begin trading in POSIT after the market's open or after a trading halt unless both (1) and (2) are met. Peg day orders already resting on the POSIT order book just prior to a trading halt will remain on the order book after the trading halt commences. Y As described in Part III, Item 10(a) above, POSIT will not begin trading after the market's open or after a trading halt in a given security until one of the following occur: (1) a trade occurs on the primary market whose size is at least a round lot, or (2) a bid and offer for the security has been posted on the primary market. A Subscriber can request to not begin trading in POSIT after the market's open or after a trading halt unless both (1) and (2) are met. Unexecuted orders and trading will be treated in accordance with the procedures described in Part III, Item 11(c). Y N POSIT is an equity crossing system providing a continuous trading environment in all NMS stocks for orders received by POSIT through a variety of means, both direct and indirect, as described in response to Part III, Item 5. POSIT operates three general crossing sessions: (i) the Continuous Crossing Session; (ii) the Alert Crossing Session; and (iii) the Agency Close Crossing Session. Each of these crossing sessions is described in detail in response to Part III, Item 11(c). POSIT's methodology for crossing is price and then pro rata split, as described in Part III, Item 7(a). All NMS stocks are eligible for trading in POSIT. POSIT may, in its sole discretion, stop trading certain symbols for, among other reasons, the purpose of remaining below the volume thresholds for (i) classification as an "SCI Entity" under Regulation SCI and (ii) certain regulatory requirements as set forth in Rules 301(b)(3) and (5) of Regulation ATS. Y POSIT operates three crossing sessions: (i) the Continuous Crossing Session, (iii) the Alert Crossing Session (ii) the Agency Close Crossing Session, and. POSIT offers the ability to participate in the three crossing sessions to all Subscribers. Note, the rules and procedures applicable to the Continuous Crossing Session apply to the other crossing sessions unless otherwise stated. Subscribers can specify which session to route an order to via a specific FIX tag. POSIT's methodology for crossing is that priority is based on price and then eligible orders receive allocations based on a pro rata split, as described in Part III, Item 7a. If shares cannot be evenly split on a pro rata basis, then POSIT will randomly choose an order to receive a smaller allocation. POSIT reserves the right to review any transaction based upon the request of a Subscriber or on its own motion and declare any transaction executed by POSIT null and void in the event that the transaction occurred at a price that was within the numerical guidelines for erroneous transactions of any exchange or was the result of a significant systems disruption. In reviewing transactions resulting from significant systems disruptions, in addition to the price of the transactions, POSIT may also take into account the volume of transactions as compared to the normal volume of transactions for the relevant security as executed by POSIT. POSIT reserves the right to use its discretion to provide price accommodations in circumstances that are not clearly errors or erroneous transactions but where the circumstances are appropriate, such as minor systems latency, to make a price adjustment as an accommodation to an affected client(s). In these scenarios, the Firm performs an analysis to determine the appropriate price and any profit or loss as a result of the adjustment is incurred by VAL. Below are descriptions of the Continuous Crossing Session, the Agency Close Crossing Session, and the Alert Crossing Session. Continuous Crossing Session During the Continuous Crossing Session, Subscribers may only enter orders that are Peg or IOC order types. Peg orders can be submitted to POSIT beginning at 8:00 a.m. and through the trading day until the market closes at 4:00 p.m. and are held in POSIT's order book until they are executed, cancelled or until they expire. When a Peg order is submitted to POSIT, the system scans for available liquidity to determine whether there is a contra-side Peg order residing in the system. If there is no contra-side Peg order in POSIT, the Peg order will continue to rest in POSIT until executed or cancelled and returned. Peg orders in POSIT will execute immediately with contra-side IOC orders, unless one of the orders' instructions make it ineligible for execution. Peg orders can be executed against contra-side Peg orders and/or IOC orders; however, IOC orders can only be executed against Peg orders. POSIT cancels unexecuted Peg orders in accordance with the instructions of the submitting Subscriber, or by default at the close of regular trading in the market. If a Peg order expires without being fully or partially filled, the Subscriber submitting that order receives a "nothing done" report. IOC orders are immediately executed or immediately canceled upon receipt. For Subscribers' orders that partially executed during the Continuous Crossing Session, the residual shares will be cancelled back to the Subscriber after the close of trading. POSIT only executes orders at the midpoint of the NBBO, the NBO or the NBB. In the first instance, POSIT will attempt to cross eligible orders at the midpoint of the NBBO. If midpoint pricing is unavailable, POSIT will then look to other matching opportunities at the NBB or NBO, as applicable. Subscribers accessing POSIT directly can request that POSIT apply certain default instructions or attributes to the Subscriber's orders submitted to POSIT, as described in Part III, Item 7(a), and Part III, Item 14a. POSIT will execute crosses at prices within the permissible price bands established under the Limit Up - Limit Down Plan. POSIT is programmed to prevent executions outside of the Limit Up ? Limit Down price bands. Subscribers can include MEQ instructions on their orders. In that event, POSIT will not execute the order in an amount less than such minimum quantity. However, when the remaining quantity on the order is less than the MEQ instruction, POSIT will not automatically cancel back the remaining quantity of the order, but will attempt to execute that unfilled portion in a single execution. Subscribers can also instruct that their orders only execute against a single contra that meets the MEQ instruction for their order, as described in Part III, Item 7(a). If Subscribers do not request this, POSIT's default behavior is to consolidate contra interest to meet a Subscriber's MEQ Instruction. Subscribers can request that POSIT always cancel remaining shares after an execution where the remaining quantity on the order is less than the MEQ, as described in Part III, Item 7a. Where multiple resting orders have a MEQ instruction specified by the Subscriber, POSIT can alter the pro-rata formula to allow an execution when one might otherwise not occur: * In that circumstance pro-rata reallocation ratio is 80/20. This means that if an order is getting 1000 shares as per initial pro-rata calculation, 80% (800 shares) will be allocated, and 20% (200 shares) can be used to satisfy the minimum shares of other, larger orders with a minimum quantity size. In certain instances, the reallocation will result on one resting order being filled with all of the eligible shares and the other order(s) receiving no allocation. * There is a threshold above which the 80/20 rule applies. Orders with pro-rata allocations equal to or less than 200 shares are not guaranteed any allocation. If multiple orders do not meet their MEQ instructions in the initial allocation, order size priority is used as a tie-breaker to allocate additional shares to satisfy MEQ instructions. Please see Attachment 11(c) for illustrative examples. Alert Crossing Session conform VAL offers a conditional messaging system known as Alert. Alert is an anonymous Conditional Order matching application that exists outside of the POSIT matching engine. Please see Part III, Item 9a for a description of Alert. Agency Close Crossing Session Subscribers can instruct the Firm to enter an order into the Agency Close Crossing Session via a FIX tag. The Agency Close Crossing Session only accepts Market orders. POSIT will reject Limit orders. Only buy and sell orders are accepted; short sell orders will be rejected. POSIT will only accept orders for the Agency Close Crossing Session between 3:50:01pm ? 4:00pm EST. Orders sent outside of this time frame will be rejected. The closing price for each security will be the closing price disseminated to POSIT from the primary exchange data feed. Subscribers will receive indicative fills ahead of the close as soon as there is a match. Portions of the Agency Close Crossing orders that have not yet been indicatively matched may be cancelled at any time up to 4:00PM EST. POSIT will reject orders submitted to the Agency Close Crossing Session if the security is halted or paused at the time of submission. If a cross cannot be consummated because a security is halted or paused or the primary closing price for the security is not published by the primary exchange for any reason, POSIT will cancel any indicative fills and return the unfilled portion of the affected orders. All sessions Locked and Crossed Markets: POSIT does not execute in a crossed market, but will execute in a locked market. Subscribers have the option of not executing in a locked market at the session level. Price Protection: There are no Price Protection mechanisms. Short Sales: Subscribers are required to mark short sale orders as "sell short" or "sell short exempt". POSIT does not execute short sell orders at the bid price in securities subject to a Reg SHO Rule 201 price restriction. Y N N N POSIT: Contra Participant Specific Blocking: Subscribers can request to block interaction with specific Subscribers within POSIT. Upon request, execution performance reports can be provided to Subscribers on their order flow, grouped by contra Subscriber, time in force, and peg instruction. Metrics included in the execution performance reports can include, but is not limited to, shares executed, average trade size, and stock price movement after the time of fill (mark outs). Contra Subscribers are anonymized in the execution performance reports. Upon receiving this information, a Subscriber can request which anonymized contra Subscribers to block interaction against, either in totality, or can specify specific contra Subscriber blocking by time in force and/or peg instructions. Once a Subscriber specifies a contra Subscriber block, that block will remain in effect until the Subscriber requests for that block to be removed. Subscribers can request Contra Participant Specific Blocking through their salesperson, who enter a ticket to make the request. Thereafter, an entry is made in a configuration file which takes effect in most cases on the next business day, but could take effect either the same day or greater than the next business day, depending upon the time of day the request is submitted. Liquidity Guard: Liquidity Guard is an automated means where VAL prevents certain IOC and Peg orders from interacting with resting Peg orders. Stocks that are subject to the interaction restrictions of Liquidity Guard are those that have a historical bid offer spread that is greater than or equal to $0.03 per share or a trailing 21-day average daily volume that is less than or equal to 3 million shares. Liquidity Guard uses inputs including a stock's trailing intraday bid offer spread, historical bid offer spread, and volatility, to compute price bands where executions can take place on a security basis. If a potential match of an incoming IOC or Peg order against a resting Peg order would occur at a price outside of the computed price bands for a particular stock, then the IOC or Peg order would be blocked from interacting against the resting Peg order. All Subscribers are subject to Liquidity Guard, but a Subscriber may elect to opt out of having their Peg orders subject to Liquidity Guard. Subscribers can request to opt out of Liquidity Guard through their sales person, who enter a ticket to make the request. Thereafter, an entry is made in a configuration file which takes effect in most cases on the next business day, but could take effect either the same day or greater than the next business day, depending upon the time of day the request is submitted. Subscribers are not provided with any information on when Liquidity Guard effected the interaction of their orders. Liquidity Guard is not employed in Alert. Self-Match Prevention: Subscribers may provide instructions that will prevent orders from crossing if the resulting cross may result in a transaction with no change in beneficial ownership. Subscribers can request Self-Match Prevention through their salesperson, who enter a ticket to make the request. Thereafter, an entry is made in a configuration file which takes effect in most cases on the next business day, but could take effect either the same day or greater than the next business day, depending upon the time of day the request is submitted. Further, Subscribers are able to block interaction against certain Virtu MPIDs. See the response to Part II, Item 3b for further detail. Alert: Participant Type Blocking: Electronic Participants can request to block interaction against Human Participants via a FIX tag, on an individual order basis. Human Participants can request to block interaction against Electronic Participants. This blocking instruction is supported at the session level. Participant and Symbol Specific Blocking: Alert Sales and Coverage personnel can block certain participants in whole or at a symbol level. Alert Sales and Coverage personnel apply participant blocks in whole, or at a symbol level, on an intraday basis if a participant is having a technical issue. For example, if an Alert participant was duping messages repeatedly then the Alert Sales and Coverage personnel could introduce a temporary block until the issue was resolved. Alert Sales and Coverage personnel can lift this block once the participant verifies the technical issue has been resolved. Symbol level blocks are also applied on an automated basis between an Electronic Participant and a Human Participant if within a three-minute span, for a given symbol, five consecutive invitations to Firm Up between the two participants result in no trades, a two minute block will be applied between the two participants in the given symbol. After the two- minute blocking period, the block between the two participants will automatically be lifted in the given symbol. The three-minute time span begins at the time of when the first invitation is sent. Symbol level blocks do not carry over into the next trading day. Please see Part III, Item 9(a) for more detail on the POSIT Alert Conditional Order process. Self-Match Prevention: Subscribers may provide instructions that will prevent orders from crossing if the resulting cross may result in a transaction with no change in beneficial ownership. Y N As described above in response to Part III, Item 9, Alert, through the Conditional Order invitation process, makes information available to Alert participants that might prompt the user to send an order to POSIT. This information includes the symbol where contra side order exists in Alert. Y N As noted above in response to Part III, Item 10(a), Subscribers can route orders to POSIT to participate in the Continuous Crossing Session (i.e., during regular trading hours), the Alert Crossing Session (i.e., during regular trading hours), or to participate in the Agency Close Crossing Session (i.e., during the last 10 minutes of trading). Orders routed to the Agency Close Crossing Session are benchmarked to the closing price for the security on the primary market, subject to primary market price availability. See Part III, Item 11(c), for more detail on the Agency Close Session. Y N Some Subscribers do not have a dedicated rate for executions in POSIT, but, instead, have a default rate across VAL's products where that default rate can apply to executions in POSIT. The commissions charged to execute in POSIT can vary based on the means of access. Direct Subscribers not using other products are charged a rate per executed share ranging from $0.0005 to $0.0065. Orders originating from Subscribers accessing POSIT through Alert, VAL's algorithms, smart order router, trading desks, and/or Alert are charged a rate per executed share based on the fees associated with the particular products used by the Subscriber, irrespective of whether the orders are executed in POSIT or another venue. VAL negotiates its commissions for use of its execution products and services, which could include executions in POSIT, on a client-by-client (including Subscriber-by-Subscriber) basis. VAL will consider a number of factors in determining the fee an individual client will be assessed, including, but not limited to, the client's overall relationship with the Firm, the type of trading flow, the amount of trading flow, and the markets that will be traded. VAL does not provide rebates or discounts. VAL has controls and systems in place to suspend trading on a symbol, Subscriber, or POSIT basis. As described below, these controls enable VAL to stop trading activity to meet regulatory requirements and address any issues impacting the quality of executions within POSIT for, among other reasons, approaching Regulation ATS Fair Access and Regulation SCI volume thresholds. POSIT honors trading halts and/or trading pauses that are announced pursuant to the Limit Up ? Limit Down Plan and the Market Wide Circuit Breakers by automatically blocking trade execution upon notice of a trading halt. Specifically, during a regulatory halt for a security, POSIT will (1) accept Day orders in the security, but not execute trades, and (2) accept IOC orders in the security but immediately cancel them back to the Subscriber. Subscribers have the ability to cancel or modify day orders during a trading halt. Furthermore, VAL retains discretion to suspend trading in a given security at any time for any reason, and can accept, reject, or cancel Subscriber orders. POSIT will not execute orders if the NBBO is crossed. POSIT will reject orders in certain NMS Stocks, including any symbols on POSIT's restricted list or symbols for which POSIT seeks to remain below certain volume thresholds. In those circumstances POSIT will provide clients with notice of the symbol(s) that will be unavailable by posting information on the POSIT page on the Virtu Financial, Inc. website (http://www.virtu.com). With respect to the Agency Close Crossing Session, POSIT will reject orders if the security is halted or paused at the time of submission. If cross cannot be consummated during the Agency Close Crossing Session because a security is halted or the primary closing price for the security is not published by the primary exchange for any reason, POSIT will cancel any indicative fills and return the unfilled portion of the affected orders. Y VAL reports all POSIT transactions to the FINRA NASDAQ CARTERET TRF. POSIT does not have a connection to other FINRA TRFs. In the event that POSIT is unable to report transactions to the NASDAQ CARTERET TRF, POSIT will cease trading, cancel existing orders, and reject new orders. Y VAL is the counterparty to all trades that occur in POSIT and VAL clears and settles with each counterparty. Broker-dealer Subscribers are required to be self-clearing or have an arrangement with a clearing firm. All transactions are submitted to NSCC for clearance and settlement. Subscribers may elect to clear their transactions via a Qualified Service Representative (QSR) agreement or via an Automated Give-Up (AGU) agreement. For Subscribers that are Customers, VAL will settle their transactions through the facilities of the DTCC via RVP/DVP settlement. VAL will clear and settle Indirect Subscriber trades in the same manner as Direct Subscribers. Y POSIT employs a proprietary market data system that uses direct market data feeds from exchanges to determine the NBBO. POSIT utilizes this proprietary system to price, prioritize, and match orders in the POSIT Continuous, POSIT Alert, and POSIT Agency Close Crossing Sessions, in compliance with regulations, including Reg NMS and Reg SHO. SIP data is used as a backup feed, and is used in place of a direct feed from a particular exchange if that exchange is experiencing a technical issue. Switching to the SIP data feed is done via an automated process that compares direct feed data to SIP data. Additionally, Core Operations have the ability to switch to the SIP data feed on a discretionary basis. Switching back to direct feed data from the SIP data feed is done purely on a discretionary basis, and is performed by the Core Operations team once this team has confirmed that direct feed data in question is correct. The SIP data feed is also used for regulatory items, including limit up/limit down bands, trading halts, and Reg SHO designations. With respect to trades executed as a result of an Agency Close Crossing Session match, the closing price for each security will be the closing price disseminated to POSIT from the primary exchange data feed. Y N N true true