US electronic stock exchange group Bats Global Markets has launched a liquidity management provider (LMP) program on the Bats ETF Marketplace, in a bid to incentivise exchange traded-product liquidity providers to trade on Bats.

Bryan Harkins, Executive Vice President, Head of US Markets, at Bats.

The LMP Program rewards liquidity providers based on their quoting quality in LMP securities. The list of securities includes all Bats-listed ETPs and some non-Bats-listed ETPs. Liquidity providers must enrol to be an LMP for an eligible ETP and may participate as an LMP in multiple listings.

“As the #1 US market for the trading of ETPs, we are pleased to offer this initiative in partnership with our customers and issuers,” said Bryan Harkins, Executive Vice President, Head of US Markets, at Bats. “In addition to our existing Lead Market Maker Program, the LMP Program offers unique economic incentives tied to quoting activity.”

LMPs are incentivised to meet the following quoting standards in the LMP Securities that they are enrolled in:
– To provide a minimum of 100 shares at the national best bid and offer quotes for a minimum of 15% of regular trading hours, or
– To provide the national best bid and offer size-setting quote for a minimum of 25% of regular trading hours, and
– To provide at least 2,500 shares on both the bid and offer at a maximum of 2% away from the national best bid and offer quotes.

LMPs who adhere to these requirements will be eligible for a rebate per share traded.

The Bats market maker program is a rewards-based program that aims to boost liquidity on the Bats exchange by providing rebates to market makers for increasing liquidity on their assigned ETPs. Firms need to apply for the designation but, upon successful application, they would become the exclusive market maker for that ETP. The price initiative seeks to broaden the coverage of Bats-listed ETPs by encouraging firms to become market makers in a greater number of products.