BATS Global Markets chairman and CEO Joe Ratterman said as they grow listings business, they are creating new and unique ways to make the markets better for today’s issuer and enhance competition in the exchange listings business.
"Our Competitive Liquidity Provider program is designed to help improve market quality for issuers and we are excited to bring this innovative program to market," added Ratterman.
The BATS CLP programme, designed for the company’s new US primary listings business, is a rewards-based programme to incent market makers to make tighter quoted spreads with increased liquidity for each listing on BATS.
The company noted the CLP programme is particularly suited for small and mid-cap companies who are often challenged by a lack of liquidity in their stock, which can make attracting larger investors difficult.
Through the BATS CLP programme, market makers compete for a daily reward by posting competitive quotes in a stock or exchange traded product (ETP).
CLPs are rewarded based on their continuous daily quoted size at the National Best Bid/Offer (NBBO) in the securities for which they are registered CLPs.
Each liquidity provider must be a registered Market Maker on BATS and register, and be approved by BATS to be a CLP for a listing.
There is no also limit to the number of CLPs that can be registered in each corporate listing.
In addition, for ETPs, rather than designating a single liquidity provider, the CLP programme encourages multiple liquidity providers to participate in the launch of an ETP public offering.
