Market Making & Liquidity Provision
Liquid and well-functioning secondary markets allow investors to buy and sell their assets quickly and efficiently. TMX Australia Exchange has commercial programmes to incentivise eligible firms to improve liquidity on the TMX Australia Exchange market.
TMX Australia Exchange Market Maker Fee Programme
The TMX Australia Exchange Market Maker Fee Programme (“Market Maker Programme”) provides fee relief for eligible market makers registered with TMX Australia Exchange when meeting liquidity requirements in eligible symbols. The eligible symbols currently include the majority of Australian ETFs quoted on ASX and TMX Australia Exchange (note that funds with internal market making arrangements are not included). Market makers play a crucial role in providing liquidity, particularly for investment products, by providing quotes throughout the trading day priced at or close to fair value.
Features and Benefits of the Market Maker Programme
Features of the Market Maker Programme
- A broad range of eligible Australian ETFs
- Straight forward application process
- No obligation to provide liquidity that meets the liquidity requirements (subject to ongoing performance monitoring to remain in the Market Maker Programme)
Benefits for Registered Market Makers
- Recognition on the TMX Australia Exchange website as a registered market maker, showing your firm's commitment to providing liquidity
- Customised reports for registered market makers to track their performance
- Certain trading fee relief when they meet the liquidity requirements
- For registered market makers that are TMX Australia Exchange trading participants, certain connectivity fee relief when they meet additional liquidity requirements
How to Become a Registered Market Maker
Generally, a firm must (1) hold an appropriate licence or exemption required to participate, (2) be either a TMX Australia Exchange trading participant or have an arrangement with a TMX Australia Exchange trading participant and (3) agree to the terms and conditions of the Market Maker Programme. The application process is:
- contact TMX Australia Exchange Sales to sign an application form;
- choose the symbols for which your firm would like to register; and
- assign a reference to identify trading messages submitted in its capacity as a market maker registered in the Market Maker Programme.
| Registered Market Makers | View list of TMX registered Market Makers |
|---|---|
| Market Making Models | Overview and risks of the Material Portfolio Information External Market Making Model and Internal Market Making Model |
Additional Liquidity Provider Scheme Fee Programme
The Additional Liquidity Provider Scheme Fee Programme (“ALPS Programme”) provides fee relief for eligible liquidity providers registered with TMX Australia Exchange in relation to trades resulting from lit orders above a minimum size that either set or join the National Best Bid & Offer (NBBO) in stocks in the ASX All Ordinaries Index. Liquidity providers play a key role in improving the market quality of Australian Equities trading by enriching lit liquidity at NBBO.
Features and Benefits of the ALPS Programme
Features of the ALPS Programme
- All stocks in the ASX All Ordinaries Index
- The minimum size is reviewed quarterly and reflects the semi-annual ASX All Ordinaries Index rebalances
- Straight forward application process
- Eligible executed orders qualify for relief with no ongoing obligation (subject to ongoing performance monitoring to remain in the ALPS Programme)
Benefits for Registered Liquidity Providers
- Customised reports for registered liquidity providers to track their performance
- Trading fee relief resulting from eligible executed orders that either set or join the NBBO on TMX Australia Exchange
How to Become a Registered Liquidity Provider
Generally, a firm must (1) hold an appropriate licence or exemption required to participate, (2) be either a TMX Australia Exchange trading participant or have an arrangement with a TMX Australia Exchange trading participant, (3) have a proprietary order flow assessed by TMX Australia Exchange as eligible, including demonstrating that it is designed to proactively provide liquidity in a manner consistent with the ALPS Programme's objectives and (4) agree to the terms and conditions of the ALPS Programme.
The application process is:
- contact TMX Australia Exchange Sales to sign an application form; and
- assign a reference to identify the proprietary flow participating in the ALPS Programme.
Registered Market Makers
