Bats Launches Incentivized Program for ETP Market Makers
- Bats has opted to create a more favorable environment for market makers via the launch of a reward program.
Bats Global Markets, Inc. (Bats) has altered its incentive schemes for Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term, namely those who play an integral role in the life cycle of exchange-traded-products (ETPs), per a company statement.
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Bats has opted to create a more favorable environment for market makers via the launch of a reward program, which builds on an existing Issuer Incentive Program for all ETPs. In particular, the new iteration of its payment program helps allow a given issuer to capture benefits from listing on Bats.
As such, market markers can earn a potential annual incentive payment of up to $400,000 to each fund with a Consolidated Average Daily Volume (CADV) of over 1 million shares per day. This push was reinforced by rebates to Lead Market Makers (LMMs) for select products, following consultation with key ETP industry participants. The final result of the initiative will be the unveiling of the Lead Market Maker Partnership Program, which is slated to come into effect on September 1, 2016.
Multi-Tiered Rebates
The CADV ranges per-product will reflect the level of rebate available to LMMs, which can be derived from the following table:
According to Laura Morrison, Senior Vice President (SVP) and Global Head of Exchange Traded Products at Bats, in a recent statement on the program: “We are committed to helping our issuers grow the assets under management and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term of their listed products, and separately, ensure that liquidity provision is sustainable throughout an ETP’s lifecycle.”
Laura Morrison
“By further incentivizing market makers, through the most competitive ETP incentive scheme available globally, they will be able to provide deeper and more resilient liquidity to all their assigned products,” she added.
“Our pioneering, nimble nature allows us to experiment and adjust where necessary to best suit the markets and participants we serve. In this instance, the excellent dialogue we have with ETP industry participants, and in particular, our fast-growing and very diverse family of issuers and market-makers, has led us to make this change to our incentive schemes,” explained Bryan Harkins, Executive Vice President (EVP) and Head of U.S. Markets at Bats in an accompanying statement.
Bats Global Markets, Inc. (Bats) has altered its incentive schemes for Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term, namely those who play an integral role in the life cycle of exchange-traded-products (ETPs), per a company statement.
Take the lead from today’s leaders. FM London Summit, 14-15 November, 2016. Register here!
Bats has opted to create a more favorable environment for market makers via the launch of a reward program, which builds on an existing Issuer Incentive Program for all ETPs. In particular, the new iteration of its payment program helps allow a given issuer to capture benefits from listing on Bats.
As such, market markers can earn a potential annual incentive payment of up to $400,000 to each fund with a Consolidated Average Daily Volume (CADV) of over 1 million shares per day. This push was reinforced by rebates to Lead Market Makers (LMMs) for select products, following consultation with key ETP industry participants. The final result of the initiative will be the unveiling of the Lead Market Maker Partnership Program, which is slated to come into effect on September 1, 2016.
Multi-Tiered Rebates
The CADV ranges per-product will reflect the level of rebate available to LMMs, which can be derived from the following table:
According to Laura Morrison, Senior Vice President (SVP) and Global Head of Exchange Traded Products at Bats, in a recent statement on the program: “We are committed to helping our issuers grow the assets under management and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term of their listed products, and separately, ensure that liquidity provision is sustainable throughout an ETP’s lifecycle.”
Laura Morrison
“By further incentivizing market makers, through the most competitive ETP incentive scheme available globally, they will be able to provide deeper and more resilient liquidity to all their assigned products,” she added.
“Our pioneering, nimble nature allows us to experiment and adjust where necessary to best suit the markets and participants we serve. In this instance, the excellent dialogue we have with ETP industry participants, and in particular, our fast-growing and very diverse family of issuers and market-makers, has led us to make this change to our incentive schemes,” explained Bryan Harkins, Executive Vice President (EVP) and Head of U.S. Markets at Bats in an accompanying statement.