BATS Proposes Rewards Program for Market Makers

BATS Global Markets applied with the U.S. Securities and Exchange Commission to launch a platform it said will give market makers a financial incentive to boost liquidity and create tighter spreads on its exchange.

The firm said the Competitive Liquidity Provider program would ultimately benefit all issuers, particularly those who are often beset by a lack of liquidity in their shares, a problem that can make attracting larger investors difficult.

"One of the many challenges for today's issuers is attracting liquidity to their stock, and we believe we've developed a unique program that addresses this very issue," BATS Global Markets Chief Executive Joe Ratterman said in a statement.

The exchange operator said through the BATS CLP program, liquidity providers would compete for a daily reward by posting competitive quotes in a stock or exchange-traded product. The liquidity providers, who must be a registered market maker on BATS and be classified as a CLP for a listing - will be rewarded based on their continuous daily quote size at the National Best Bid/Offer, BATS said.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio