Cboe to present new program of choice for leading ETP market makers
Cboe will present a new program of choice for leading ETP market makers, starting February 1
- Designed to help further improve the market quality for Cboe listed ETPs
- Aims to offer major market makers greater choice and flexibility in choosing an incentive model
- The new program is developed in close consultation with participants from the ETP industry
- Builds on the success of Cboe’s previous LMM incentive offerings
CHICAGO – January 25, 2020 – 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 further improve quality for exchange-traded products (ETP) primarily listed on Cboe BZX Exchange, effective Monday February 1, subject to regulatory review.
Previously, Cboe had offered the market’s first incentive program that granted major market makers (LMMs) a fixed daily fee, rather than a payment based on the transaction volume of allocated ETPs, to help incentivize LMMs to provide liquidity in new or weakly traded ETPs. Following extensive consultations 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 selection. the incentive model that best suits their needs.
As part of the new incentive program, which is expected to go into effect on 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. . It is expected that LMMs may opt for a disproportionate discount per share from the current default fixed allocation for ETPs that have a consolidated average daily volume of 1,000,000 shares or more.
Laura Morrison, Senior Vice President and Global Head of Listings at Cboe, said: Incentive program to help provide greater liquidity for listed ETPs. Designed to benefit all market participants, our new incentive program will provide LMMs with greater choice and flexibility to support issuers’ ETPs trading, which we believe will result in better quality of market for investors.
Cboe BZX Exchange offers some of the most stringent LMM listing obligations and competitive incentives available in the market, designed to reduce spreads and enhance liquidity in the ETP ecosystem. Cboe estimates that this focus on market quality has helped Cboe BZX Exchange capture 36% of all new ETP launches in the market in 2020.
Like the 2sd largest primary listing exchange for ETPs in the United States, as of January 22, 2020, Cboe BZX Exchange hosted more than 440 ETPs, representing approximately $ 400 billion in total assets under management from more than 50 unique issuers. In Europe, Cboe lists over 70 FTEs from nine unique issuers. For more information on the Cboe Listed Market, visit CboeListings.com.