Kansas City, Mo.-based BATS Global Markets on Thursday introduced a new market dedicated to exchange-traded funds (ETFs).
BATS ETF Marketplace was launched to cater to ETF issuers and investors with a new issuer incentive program and market maker program.
“As the largest market for exchange-traded funds, BATS is uniquely positioned to change the game for issuers, investors and market makers,” said Chris Concannon, BATS Global Markets CEO, in a statement.
Instead of paying to be listed, the issuer incentive program will pay ETF issuers for each product listed on BATS that generates consolidated average daily volume (CADV) of at least one million shares per day. The annual rebate rises with trading volume, from US$3,000 for products with one million to three million in CADV, up to US$400,000 for those with more than 35 million in CADV.
The new venue also rewards market makers by providing larger incentives for providing liquidity, and reduced costs for removing liquidity, in their assigned products; additionally, firms receive economic incentives for making markets in additional products listed on BATS.
“Our new lead market maker incentives are designed to further enhance the market quality of all ETPs listed on BATS, regardless of size or liquidity. Traditional market maker programs target individual symbols while our innovative market maker incentives are designed to encourage liquidity and support across an entire portfolio of ETP products,” added Laura Morrison, senior vice president, global head of exchange traded products at BATS.