Cboe to introduce new choice program for major ETP market makers, starting February 1
CHICAGO, January 25, 2021 /PRNewswire/ — Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced plans to introduce a new incentive program that aims to help improve further market quality for primarily listed exchange-traded products (ETPs) on Cboe BZX Exchange, from Monday, February 1subject to regulatory review.
Previously, Cboe offered the first market incentive program that gave leading market makers (LMMs) a fixed daily fee, rather than a payment based on trading volume assigned to ETPs, to help incentivize LMMs to provide liquidity in new markets. or thinly traded ETPs. Following extensive consultation with ETP industry participants, Cboe plans to offer an enhanced incentive program that builds on the success of its previous program and provides LMMs with additional flexibility and choice in selecting the incentive model that best meets their needs.
Under the new incentive programsupposed to be effective Monday, February 1, subject to regulatory review, Cboe plans to allow LMMs on its BZX exchange to choose between two symbol-by-symbol incentive models each month. LMMs should be able to opt for an outsized discount per share compared to the current default fixed dollar allocation for ETPs that have a consolidated average daily volume of 1,000,000 shares or more.
Laura MorrisonSenior Vice President and Global Head of Listings at Cboe, said: “We have received extremely positive feedback from the industry on our LMM incentive offerings, and based on extensive dialogue with our family of issuers and market makers, we are excited to enhance our incentive program in an effort to help provide greater liquidity to listed ETPs.Designed to benefit all market participants, our new incentive program will offer LMMs greater choice and flexibility to support the trading of issuer ETPs, which we believe will result in better market quality for investors.”
Cboe BZX Exchange offers some of the strictest LMM listing requirements and competitive incentives available in the market, designed to reduce spreads and strengthen liquidity in the ETP ecosystem. Cboe estimates that this focus on market quality helped Cboe BZX Exchange capture 36% of all new ETP launches in the market in 2020.
Like the 2n/a the largest primary listing exchange for ETPs in the United States, as of January 22, 2020Cboe BZX Exchange is home to over 440 ETPs, representing approximately 400 billion dollars of total assets under management with more than 50 unique issuers. In Europe, Cboe lists more than 70 FTEs from nine unique issuers. For more information on the Cboe Listed Marketplace, visit CboeListings.com.
About Cboe Global Markets, Inc.
Cboe Global Markets (Cboe: CBOE) provides industry-leading trading and investment solutions to market participants around the world. The company is committed to defining markets through product innovation, cutting-edge technology and transparent business solutions.
The company offers trading in a diverse range of products across multiple asset classes and geographies, including options, futures, US, Canadian and European equities, exchange-traded products (ETPs), currencies (FX) and volatility products based on the Cboe. Volatility Index® (VIX® Index), recognized as the world’s premier indicator of US stock market volatility.
Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the United States. Additionally, the company operates one of the largest exchanges by value traded in the United States. Europe, and owns EuroCCP, a leading pan-European equity clearing house. Cboe is also a leading global marketplace for ETP quotes and trading.
The company is headquartered in Chicago with a network of national and global offices across the Americas, Europe and Asiaincluding major hubs of new York, London, Kansas City and amsterdam. For more information, visit www.cboe.com.
Cboe®, Cboe Volatility Index®, Cboe Global Markets®, BZX® and VIX® are registered trademarks of Cboe Exchange, Inc. All other trademarks and service marks are the property of their respective owners.
Cautions Regarding Forward-Looking Information
Certain information contained in this press release may constitute forward-looking statements. We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date made and are subject to a number of risks and uncertainties.
SOURCECboe Global Markets, Inc.