The Hybrid Agency Liaison mechanism, or HAL, automates the handling of NBBO rejects.
With HAL, Cboe quoters will match the NBBO within the flash period (currently 20ms) or the order will be routed to the exchange showing the best price.
The HAL Process
- Cboe quoters will be notified of orders requiring an NBBO step-up via a "flash" period.
- Responses by Cboe quoters willing to step up must be received within the flash period.
- If a response is received within the flash period, the order will trade at Cboe.
- Orders that are not filled during the flash period are routed to the exchange showing the best price.
- Market Makers responding to the HAL "flash" in penny pilot classes are eligible for a rebate against their transaction fee on their HAL-traded contracts if at least 70% of their quotes in a penny class are on either side of the NBBO during the preceding month.
- Order flow providers may choose to identify their executing firm number, correspondent and/or CMTA on HAL messages.