Home > Member firms
Obligations of liquidity providers Minimum requirements for liquidity providers
Liquidity providers are obliged to ensure the following minimum requirements in entering the said orders for purchase and sale on the market (hereinafter: quote) and concluding transactions on the basis of these orders on a daily basis:
- Maximum spread between the buy and sell price (hereinafter: maximum spread);
- Minimum value of an buy and sell order (hereinafter: minimum quote size);
- Minimum quote presence period on the market (80% of the time).
The criteria of maximum spread and minimum quote size differ with regard to the group that respective securities belong in. The method of classification in respective groups is described in greater detail in Instructions for liquidity providers.
On a daily basis, it is considered that the criterion on minimum market presence has been fulfilled even if the turnover which the liquidity provider has generated during the course of the day for the account marked V amounts to EUR 145.000.
Criteria for maximum spread and minimum quote size by groups
|
Group |
Maximum spread |
Minimum quote size |
|
S1 |
3% |
EUR 12,500 |
|
S2 |
4% |
EUR 8,500 |
|
S3 |
5% |
EUR 4,500 |
|
S4 |
5% |
EUR 2,500 |
A liquidity provider is obliged to participate in auction trading and market opening with his quotes for accounts marked V. The period of presence of quotes on a daily basis is equal to the average of the presence of a liquidity provider in all conducted auctions (including the opening of the market). On a monthly or semi-annual basis, the period of presence of quotes is equal to the average daily presence of liquidity providers.
Quantitative criteria for classification of securities into groups
|
Group |
CGT |
Average daily turnover
|
|
S1 |
CGT < 100 |
at least EUR 85,000 |
|
S2 |
100 < CGT < 500 |
at least EUR 12,500 |
|
S3 |
500 < CGT < 1000 |
at least EUR 4,500 |
|
S4 |
CGT > 1000 |
- |
Securities are ranked into groups twice annually, together with a review of liquidity criteria, which serves as a basis for classification of securities either into continuous or auction trading - Classification of securities.
If a certain security fails to meet both of the quantitative criteria, then the basis for classification into groups is CGT. If a security does not achieve the average daily turnover for a respective group, it is ranked one group lower.
Discounts
Liquidity providers are entitled to a discount on the commission fee for transactions concluded in accordance with the LJSE Services Fee Schedule, which is charged once a month. |
