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Tuesday, July 7, 2015

Equity Trader Alert #2015 - 109
Nasdaq’s Lead Market Maker Program

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  • Pricing

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Lead Market Maker Program

Effective Monday, August 3, 2015, the Designated Liquidity Provider (DLP) program will be replaced by the below Lead Market Maker program:

The below credits will apply to transactions in a Qualified Security by one of its Lead Market Makers in lieu of credits provided under Rules 7018 and 7014. A Qualified Security is defined as an exchange-traded fund or index-linked security listed on Nasdaq pursuant to Nasdaq Rules 5705, 5710, or 5720 with at least one Lead Market Maker. Nasdaq has determined that there will only be one LMM per Qualified Security.

Credit to Lead Market Maker providing displayed liquidity though the Nasdaq Market Center:
$0.004 per share executed (or $0, in the case of executions against Quotes/Orders in the Nasdaq Market Center at less than $1.00 per share)

Nasdaq notes that a “Lead Market Maker” or “LMM” is a registered Nasdaq market maker for a Qualified Security that has committed to maintain minimum performance standards. For the sake of clarity, the Nasdaq market maker must be registered in the Qualified Security to be eligible for designation as an LMM and to earn the enhanced LMM rebates described above. Members interested in becoming an LMM are invited to contact U.S. Market Sales. Members currently denoted a DLP for a Qualified Security will become the LMM on August 3, 2015.

The minimum performance standards applicable to a LMM may be determined from time to time by Nasdaq and may vary depending on the price, liquidity, and volatility of the Qualified Security in which the LMM is registered. The performance measurements will include one or more of the following: (A) percent of time at the national best bid (best offer) (“NBBO”); (B) percent of executions better than the NBBO; (C) average displayed size; and (D) average quoted spread (collectively, “LMM Criteria”).

Effective August 3, 2015, the LMM Criteria will be as follows: Fifteen percent (15%) of time at the national best bid (best offer) (“NBBO”).

If an LMM wishes to withdraw from a security, the LMM must provide Nasdaq with written notice 5 days prior to the effective date.
 
 
 
 
 
 
 
 

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