Call it a case of payment for listing flow, akin to payment for order flow in the equities market.
BATS Global Markets unveiled its ETF Marketplace, a market specifically structured and designed for ETF issuers and their investors. The unveiling of the BATS ETF Marketplace – ETFMarketplace.com – features the BATS ETF Issuer Incentive program and the BATS Lead Market Maker program.
The BATS Issuer Incentive Program is an innovative and unique payment program that allows an issuer to benefit from listing on BATS by providing an annual payment for each product listed on BATS with Consolidated Average Daily Volume (CADV) greater than 1 million shares per day. Traditionally, ETP issuers have paid between $5,000 and $55,000 on an annual basis in order to be listed on a U.S. stock exchange.
BATS recently implemented a free ETP listing offering.
According to BATS, it intends to redefine the listing relationship for issuers by paying issuers for their listings. As trading volume increases for an ETP, so does the payment earned by the issuer.
“At BATS, we believe it is important for an exchange to align its interests with the interests of its issuers and their investors. Our Issuer Incentive Program accomplishes that by allowing issuers to share in the revenues from the trading of their products,” said Laura Morrison, Senior Vice President, Global Head of Exchange Traded Products at BATS. “Our Issuer Incentive program creates an opportunity for ETP issuers to offset expenses with revenue from activity in their products while trading on one of the most liquid markets for ETPs.”
The BATS ETP Issuer Incentive Program offers an annual rebate based on the following CADV ranges on a perproduct basis, as follows: ETP Issuer Incentive Schedule CADV Range* Annual Incentive Per ETP 35MM+ $400,000 20-35MM $250,000 10-20MM $100,000 5-10MM $50,000 3-5MM $10,000 1-3MM $3,000. For product to qualify, the Consolidated Average Daily Volume (CADV) must fall within the range for a consecutive 3-month period.
