Pre-Trade Transparency Guidelines

These guidelines set out TOD Markets’ approach to pre-trade transparency and permitted matching discretion for over-the-counter (OTC) derivative transactions, including transactions arranged by a Broker on behalf of a Participant.

These guidelines are designed to balance:

• transparent price discovery;

• fair access to liquidity; and

• efficient execution for Participants in an OTC bilateral market.

TOD Markets operates an OTC bilateral trading system. Trades may only be matched between Participants that have are an approved Reciprocal Counterparty.

Orders displayed on the Trading System are sequenced using price-time (FIFO) priority. However, FIFO priority applies only to the extent that counterparties are mutually eligible to trade.

Where the earliest order at a given price cannot be matched due to credit or counterparty restrictions, TOD Markets may match a later order at the same or wider price with an eligible counterparty. In such circumstances, a trade may occur through the earliest displayed order level. This outcome reflects bilateral credit constraints and does not constitute a breach of price-time priority.

These guidelines apply to all Participants and systems involved in receiving and executing Participant instructions via:

• The TOD Markets Trading System; and

• Broker-assisted channels, including recorded voice lines and secure electronic messaging (e.g. Reuters Messenger, Aircall, Cloud 9).

Where an Order is displayed on the Trading System, Participants must generally observe screen price-time priority and credit when matching trades.

However, screen priority does not apply where trades are matched pursuant to a permitted form of discretion as follows:

• block trades matched on a size-based discretionary basis;

• packaged or contingent trades;

• put-throughs, including upsizing of a prior same-day trade;

• circumstances where the on-screen counterparty is not credit-approved with the Participant;

• trades negotiated outside Trading System operating hours; and

• non-standard OTC products.

For clarity, the following concepts are distinct:

• Block trades rely on a size-based exemption from pre-trade transparency, recognising the risk of information leakage and market impact when matching large Orders.

• Broker Managed Price-improvement trades rely on an outcome-based exemption, where the trade price improves on the best visible market price, regardless of size.

A Participant may arrange a trade outside of the Trading System at their discretion, where:

• The order is for a single leg of 15MW or more; and

• The order is discretionary in nature.

Block Orders:

• are not required to observe Trading System priority; and

• must be reported to and time-stamped by the Trading System.

All discretionary Block Orders must be clearly recorded, including time, size, and pricing instructions.

Participants may arrange multi-leg trades on a contingent basis where:

• Matching of each leg is dependent on all legs being matched.

·        Packaged and contingent trades may be matched where the contingent structure makes partial or screen-based matching impractical, even where equivalent prices appear on screen.

·        No minimum size applies to packaged or contingent trades.

Please note that Package Trades (interregional or intertemporal) fees are the same as independent legs.

Put Throughs occur where Participants have pre-agreed trade terms off-platform and instruct the Broker to report the trade through the Trading System.

These are permitted where:

• Both participants confirm the product, price, volume, and counterparty.

• The broker’s role is limited to execution (no discretion or negotiation);

No minimum size applies.
Put Throughs include same-day upsizing of a previously matched trade between the same counterparties. All Put Throughs must be logged and tagged in the system.

Brokers may receive and manage Orders on behalf of Participants.

Where a Participant grants the Broker price-improvement discretion (offscreen) for an Order less than block size, brokers may price discover trade price level offscreen.

Broker Managed trades under 15MW are not booked until they are booked through the Trading System, as separate bid/offer legs.

Matching and time-stamping occur in the Trading System on a FIFO basis, so the first at a screen price has priority.

Best practice is to show an interest on screen. Participants with screen interest in an Asset should be informed when pricing improvement discretion is occurring.

TOD Markets is bilateral and, not all Participants have direct reciprocal credit.

Brokers may arrange an intermediary Participant (“Sleeve”) to facilitate a trade and support market liquidity and Order matching.

Sleeving will result in two or more legs to a trade with three or more Participants.

No minimum size applies.

Where a Participant acts solely as a sleeve to facilitate connectivity, TOD Markets will charge fees on one leg only for the sleeve provider.  

TOD Markets Brokers may facilitate, arrange or introduce bespoke and non-standard transactions between counterparties in their capacity as authorised representatives under an AFSL. These transactions involve products, structures or contract terms that are not listed, supported or capable of being traded on the Trading System and are therefore negotiated and executed bilaterally or over-the-counter between Participants.

As these products do not form part of the Market’s standardised product set and cannot be submitted to, displayed, or matched on the Trading System, they are outside the scope of the Market’s order book and price discovery process and are not subject to the Market’s pre-trade transparency requirements.

This Pre-Trade Transparency Policy is provided by TOD Markets for guidance purposes only. It does not form part of the TOD Markets Operating Rules or any participant agreement and does not create any contractual or enforceable obligations.

All matters relating to order handling, trade execution, market supervision, and participant obligations are governed exclusively by the TOD Markets Operating Rules. In the event of any inconsistency, the Operating Rules prevail.