NYSE and Nasdaq plan ETF pilot programs

The New York Stock Exchange and Nasdaq are preparing pilot programs to promote “better behaviour” from top ETF market makers, reports the Financial Times.

Read: The market maker’s role in the “ETF ecosystem”

“[L]ead market makers are supposed to quote bid and offer prices for ETF shares even in times of market stress. But on May 6, 2010 — the day of the flash crash — they were nowhere to be found,” notes the report.

NYSE’s incentive program “will allow ETF issuers to pay lead market-makers $10,000 to $40,000 per ETF per year, regardless of how much the fund is traded. At Nasdaq, ETF issuers are looking to offer $50,000-$100,00[0] to top market makers in a product if certain quoting requirements are met.”

Read the rest here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.