Cboe Unveils Market Maker Incentive Program
Cboe Plans to Introduce New Lead Market Maker Incentive Program for its Cboe Listed ETP Marketplace
- Cboe continues to innovate with a new Lead Market Maker Incentive Program that incorporates enhanced
market quality requirements
- Lead Market Makers on the Cboe Listed Marketplace planned to be rewarded for meeting certain quoting
obligations and market quality metrics for Cboe-listed ETPs
- New program planned to become effective in the third quarter of 2019, subject to regulatory review
CHICAGO – June 14, 2019 – Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding
companies,today announced it plans to introduce a new Lead Market Maker (LMM) incentive program with enhanced
market quality requirements on its Cboe Listed Marketplace for exchange traded products (ETPs).
The proposed new LMM program aims to provide a superior trading experience for issuers and investors by incenting
Lead Market Makers to demonstrably enhance market quality in the form of tighter markets and deeper liquidity for
Under the planned program, LMMs that meet certain quoting obligations and market quality requirements would
receive daily incentives based on the number of Cboe-listed products for which they are an LMM, and the aggregate
auction volume of those products. LMMs would potentially receive $10-$200 per product for which they meet the
standard requirements, and $12.50-$250 per product for which they meet enhanced market quality requirements on
a daily basis.
“We endeavor to provide the best markets and deepest liquidity for exchange traded products listed on Cboe’s ETP
marketplace,” said Laura Morrison, Senior Vice President, Global Head of Listings at Cboe. “Our proposed new and
innovative LMM program expands upon our previous program, which we believe will foster even greater market
maker engagement, particularly in newly launched and less actively traded products.”
As a leading listing venue for ETPs, Cboe has been first-to-market with several innovations to enhance market quality
and depth of liquidity for ETPs listed and traded on its marketplace. The previous rewards-based program for LMMs,
launched in 2015, offered outsized rebates and notably was the industry’s first incentive program to implement a
depth of book requirement. Cboe also introduced its Liquidity Management Provider Program in 2017, another
innovation to encourage additional quoting activity during continuous trading and therefore promote increased
liquidity in issuer sponsored securities.
The new LMM program is planned to begin in the third quarter of 2019, subject to regulatory review, and will replace
Cboe’s current LMM program.
“We are continually seeking innovative ways to define markets that benefit issuers and investors. Our new program
will essentially transform our rebate model from one that is payment for executed volume to one that is payment for
market quality. We expect this to align the interests of market makers and issuer clients, and improve the overall
trading environment for investors and all participants in our marketplace,” said Morrison.
Cboe has more than 320 ETPs from over 50 issuers listed on its Cboe Listed Marketplace. Further information on
Cboe’s new LMM Program is available at CboeListings.com.
SOURCE: Cboe Global Markets
The US Securities and Exchange Commission has yet to approve a Bitcoin ETF.
Trade group highlights concerns regarding the current reporting framework.
Existing regulations are strong enough, exchange operator says.
The exchange also expands its volatility benchmark offering.