Cboe Europe Equities Liquidity Provision
The Cboe Europe Equities (Cboe) Liquidity Provider Program (LPP) and Liquidity Provider Scheme (LPS) have been designed to ensure deep liquidity in securities traded on the Cboe Europe Equities (Cboe) integrated order books. Registered Liquidity Providers post and maintain continuous bid and ask prices for their chosen securities, subject to certain commitments as set out below.
Liquidity Provider Programs
Cboe offers four Liquidity Provider Programs, under which all traded symbols are eligible for participation. Cboe has four Liquidity Provider Programs. Participants may elect to enroll in one or more of these programs. Participants can choose to participate for one or more of these programs. Participants must post and maintain executable quotes on the integrated order book(s) for the chosen securities and complying with the time, size and price requirements, as set out in the table below:
| Required Size * | Specified Price % | Required Time | Required Market Share | |
|---|---|---|---|---|
| Program 1 | €5,000 | 0.25% | 80% | n/a |
| Program 2 | €5,000 | As per LPP commitment | 95% | n/a |
| Program 3 | None | 2% | 50% | n/a |
| Program 4* | €5,000 | As per LPP commitment | 95% | 0.5% |
Program 4 is applicable to the DXE environment only
LPP 1 Qualifying Symbols**
| Symbol Name | Symbol | ISIN | Currency | Cboe Venue | Qualifying Date |
|---|---|---|---|---|---|
**A security available for trading on Cboe NL and specifically identified as eligible for LPP1 stipend credit payments as per the Cboe NL Trading price list criteria.
Liquidity Provider Schemes
Cboe has three commercial Lliquidity Provider Schemes designed to promote and reward liquidity provision along with the setting of competitive prices as set out below:
- Liquidity Provider Scheme (LPS)
- Additional Liquidity Provider Scheme (A-LPS)
- Retail Attested Liquidity Provider Scheme (RA-LPS)
Liquidity Provider Scheme (LPS)
LPS relates to added executions on the CXE/DXE Lit Order Book. All participants will be automatically enrolled into the LPS monitoring however participants wishing to opt out must request it via email to their Sales Account Manager. LPS applies only to those securities that participants are active in. Participants must achieve a minimum average 0.5% passive market share of the total passive value traded on the CXE/DXE lit order book in those securities over a month in order to be eligible. Participants that achieve the minimum LPS obligations will qualify for a rebate based upon the total notional value of added executions in their active securities.
Additional Liquidity Provider Scheme (A-LPS)
A-LPS is an innovative pricing model that rewards participants for setting the Best Bid or Offer (BBO) on the Cboe CXE/DXE Lit Order Book. A-LPS applies to qualifying symbols identified in the Cboe reference data files and allows participant orders that set a new price level of a qualifying minimum size on the CXE/DXE Lit Order Book to be eligible for an additional rebate on top of the standard rebate.
Retail Attested Liquidity Provider Scheme
RA-LPS scheme has been designed to support Cboe’s retail offering with participants able to register for one or more of the following groups. Participants submitting RLP orders will be monitored against the below group criteria
| RA-LPS Group | REQUIRED SIZE | Price Requirement | Required Time (per month) | Minimum no. of symbols per group |
|---|---|---|---|---|
| BlueChip | €5,000 | EBBO or Better | 85% | 85% |
| Midcap | €4,000 | EBBO or Better | 80% | 60% |
| Smallcap | €3,000 | EBBO or Better | 75% | 40% |
| Exchange Traded Products (ETPs) | €5,000 | EBBO or Better | 80% | 40% |
- Securities in each group are defined in the Cboe CXE and DXE reference data file
- In addition to the above requirements a Participant must also be present for at least 90% of the trading month, as measured in days
- RA-LPS will be assessed by the total symbol time at EBBO (a combination of # of symbols and time at EBBO)
- Assessment is based on a Participants clearing access to an underlying market, with any markets/symbols not available to the Participant to trade removed from the RLP assessment
Features and Benefits of the LPP
Features of the LPP
- A broad range of eligible securities
- Straightforward application process
- Ability to select or update registered securities via website login
- Registered Liquidity Providers (RLP) can either register in a portfolio of their chosen securities or quickly select a specific index or market segment
Benefits for Registered Liquidity Providers
- Recognition on the Cboe website as a registered liquidity provider, showing your firm’s commitment to providing liquidity
- Customised reports for registered liquidity providers to track their performance
How to Become a Registered Liquidity Provider
Only direct trading Participants of Cboe are eligible to become registered liquidity providers. The three step process for Participants is:
- complete and sign the Liquidity Provider Addendum to the Participant Agreement, agreeing to the terms and obligations of the Program;
- choose the securities for which your firm would like to register; and
- identify and assign specific trading groups for the LPP.
Current Registered Liquidity Providers
| Liquidity Provider | CXE | BXE | DXE |
|---|---|---|---|
| BNP Paribas Financial Markets SNC | Yes | Yes | Yes |
| BRED Banque Populaire | No | No | Yes |
| Citadel Securities (Europe) Limited | Yes | Yes | No |
| Citadel Securities GCS (Ireland) Limited | No | No | Yes |
| Erste Group Bank AG | No | No | Yes |
| FlowTraders B.V. | Yes | Yes | Yes |
| Goldenberg Hehmeyer LLP | Yes | No | Yes |
| HRTEU Limited | No | No | Yes |
| Headlands Technologies Europe B.V. | Yes | Yes | Yes |
| Hudson River Trading Europe Limited | Yes | Yes | No |
| Jane Street Financial Limited | Yes | Yes | Yes |
| Jump Trading Europe B.V. | Yes | Yes | Yes |
| Optiver V.O.F. | Yes | Yes | Yes |
| QRT Master Fund SPC - Torus Fund SP | Yes | No | Yes |
| Qube Master Fund Limited | Yes | No | Yes |
| RBC Capital Markets (Europe) GmbH | No | No | Yes |
| Raiffeisen Bank International AG | No | No | Yes |
| Societe Generale London Branch | Yes | Yes | Yes |
| Societe Generale SA | No | No | Yes |
| Squarepoint Master Fund Ltd | No | No | Yes |
| Tower Research Capital Europe BV | No | No | Yes |
| Tower Research Capital Europe Limited | Yes | Yes | No |
| UG Europe AG | Yes | No | No |
| UTR8 BV | Yes | No | No |
Further details of the LPP can be found in the Participant Manual.
Key Documents
Participants who are interested in the LPP and would like to become a registered liquidity provider should review the following documents:
- Participant Manual - contains further details about the Program, minimum requirements and definitions.
- Liquidity Provider Addendum