Best of the Week
Most Popular
1.UK Interest Rates, Economy GDP Forecasts 2016 and 2017 - Nadeem_Walayat
2.How Far Can Gold Price Go? - Bob_Kirtley
3.If You Miss Buying Gold – You Will Regret, it Later - Chris_Vermeulen
4.US Dollar Double Top, Gold Prospects Brightening Rapidly - Clive_Maund
5.Gold Price, Mining Stocks Rocket Higher - Zeal_LLC
6.US Economy Slides One Step Further Towards A Recession - Dr_David_J_Harris
7.Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - Michael_Noonan
8.UK Interest Rates, Economy Forecasts 2016 and 2017 - Video - Nadeem_Walayat
9.David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - Nadeem_Walayat
10.2016 - Gold & Silver Rising: A Gold And Silver Bottom May Be In - Darryl_R_Schoon
Last 5 days
What is Gold Telling Us? MAP WAVE ANALYSIS - 14th Feb 16
GOLD In Two Words - BULL MARKET - 14th Feb 16
France CAC40 Stock Market Technical Outlook - 13th Feb 16
Potential Stocks Bear Market Uptrend Underway - 13th Feb 16
HUI Gold Stocks …Meet Me at The Bottomz Inn ? - 13th Feb 16
Is This the Debt Bubbles Last Rattle? - 12th Feb 16
Gold Stocks Upside Targets - 12th Feb 16
Stock Market Observations - 12th Feb 16
Will Capital Controls Return? - 12th Feb 16
Gold, Gold Stocks, and the End Game - 12th Feb 16
Canadian Dollar Now Even Less of a Haven from US Dollar Collapse Than Before - 12th Feb 16
The Stock Market Dow Elevator; 18, 17, 16.... - 12th Feb 16
Will Harry Dent Eat Crow on His $700 Gold Price Prediction? - 12th Feb 16
Where to Hide Your Money From Reckless Governments - 12th Feb 16
The War on Cash is About to Go into Hyperdrive - 11th Feb 16
More Bankruptcy For Your Retirement Portfolio - 11th Feb 16
2016 - Gold & Silver Rising: A Gold And Silver Bottom May Be In - 11th Feb 16
Gain Trading Confidence by Improving Your Elliott Wave Analysis Skills - Video - 11th Feb 16
With A Gloomy Start To 2016, A Bust Seems Just Around The Corner - 11th Feb 16
UK Interest Rates, Economy Forecasts 2016 and 2017 - Video - 10th Feb 16
World Markets Are in Sync - 10th Feb 16
If You Miss Buying Gold – You Will Regret, it Later - 10th Feb 16
The Fed Doesn't have a Clue! - 10th Feb 16
How Far Can Gold Price Go? - 10th Feb 16
It's Stock Market Panic Time! - 9th Feb 16
Gold Stocks Picks for Patient Pickers - 9th Feb 16
Oil Price Collapse U.S. Recession Odds 2016 - 9th Feb 16
Preparing for Crisis - It's About Risk Mitigation and Capital Preservation - 9th Feb 16
Top Silver Mining CEO: Don't Laugh, We Could See Silver $100+ - 8th Feb 16
Gold, Investment Leadership Changes Permanent? - 8th Feb 16
Stock Market Panic Decline Begins... - 8th Feb 16
How to Save Money By Growing Your Own Homegrown Tomatoes Indoors From Seeds - 8th Feb 16
US Economy Slides One Step Further Towards A Recession - 8th Feb 16
Gold Bear Market Bottom : Mr. Bear has left the PM Sector for Greener Pastures - 8th Feb 16
Stock Market At Important Support - 8th Feb 16
David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - 8th Feb 16
Why Crude Oil Prices Could Continue FALLING From Here - 7th Feb 16
Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - 7th Feb 16
Stocks Bear Market Continues - 7th Feb 16
Silver COT Paving Way for Sustained Upside Breakout Sharp Rally - 7th Feb 16
US Dollar Double Top, Gold Prospects Brightening Rapidly - 7th Feb 16
Gold And Silver - Is A Bottom In? Nothing Confirmed - 7th Feb 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Financial Crisis 2016

NASDAQ Seeks To Pay Market Makers In Exchange For Improved ETF Trade & Quote Performance

Stock-Markets / Market Regulation Apr 14, 2012 - 06:40 AM GMT

By: ETF_Daily_News

Stock-Markets

Jackie Noblett, writing for Ignites.com, spotted a recent SEC filing by Nasdaq that proposes a “Market Quality Program” (MQP) where, “an ETF sponsor would pay an annual fee of $50,000 to $100,000 per ETF to Nasdaq. The fee, which would be in addition to the traditional listing fees, would be passed on to market makers in the form of a rebate in exchange for improving trade and quote performance. Any fees not paid out to market makers would go back to the ETF sponsor.”


The filing states that, “in rewarding Market Makers that are willing to “go the extra mile” to develop liquid markets for MQP Securities, the MQP would clearly benefit traders and investors by encouraging more quote competition, narrower spreads, and greater liquidity… the MQP will lower transaction costs and enhance liquidity in both ETFs and their components, making those securities more attractive to a broader range of investors. In so doing, the MQP will help companies access capital to invest and grow. And the MQP may attract smaller, less developed companies and investment opportunities to a regulated and transparent market and thereby serve the dual function of providing access to on-Exchange listing while expanding investment and trading opportunities to market participants and investors.” 

The filing notes that, “There is support for paid for market making (also known as “PFMM”) at the highest governmental levels. Congressman Patrick McHenry, the Chairman of the House Committee on Governmental Reform and Oversight, for example, recently noted that agreements between issuers and market makers to pay for market making activity “…would allow small companies to produce an orderly, liquid market for their stocks. Research has shown that these agreements, already permitted overseas, have led to a positive influence on liquidity for small public companies.” [Related: SEC Widens Probe of Exchange-Traded Funds]

This program admittedly will require rule changes as it runs against the prohibitions of direct payments to market makers for liquidity imposed by the Financial Industry Regulatory Authority and Nasdaq.  

According to the Ignites.com article, there are many advocates of this program including, Adam Patti, CEO of IndexIQ, Greg Friedman, head of ETF product development at Russell Investments, and Reggie Browne, managing director at Knight Capital Group (NYSE:KCG). The common theme for their enthusiasm is the incentivization of market makers to provide the necessary seed money to bring new products to market. [Related: Financial Industry Regulatory Authority (FINRA) Warns Investors of Gold Stock Scams]

We are curious, what are your thoughts on the new rule change?

See the full SEC filing: HERE

Related: S&P 500 Index (INDEXSP:.INX), SPDR S&P 500 ETF (NYSEARCA:SPY), Nasdaq Composite (INDEXNASDAQ:.IXIC), Dow Jones Industrial Average (INDEXDJX:.DJI).

Submitted by David Bettencourt

www.etfdailynews.com

© 2012 Copyright ETF Daily News - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History