NYSE Euronext Liquidity Providers

The Role of Liquidity Providers

The role of liquidity providers is to protect against variations in volatility on the market, to facilitate transactions and to boost volumes. Liquidity providers must be members of Euronext and must possess an E.U. passport. Only members who trade on their own account may act as liquidity providers.

Main Obligations of LPs on the Secondary Bond Market

In 2009, NYSE Euronext staff met with liquidity providers active on the bond market in order to identify their areas of concern and their expectations and to promote the liquidity of the secondary market. Following these meetings, a new market-making model was created:

  • Selection of securities universe: Liquidity providers may select the universe of securities which they wish to provide prices. This universe can be updated with all new issues offered on NYSE Euronext markets.
  • Free orders and transactions: All orders and transactions executed by liquidity providers in connection with their professional responsibilities are exempt from any charges.

Liquidity Provider Criteria

  • The liquidity provider must be present for 100% of the time from 8:45 am till 17:30 pm CET and 15 minutes before every scheduled auction on a best effort basis
  • The liquidity provider must quote with a minimum of €40,000

Supervisory tools have been enriched accordingly to improve the quality of reporting and monitoring of liquidity provision.

Simplified Procedure for Requesting Liquidity Provision on Bonds
NYSE Euronext has established a simplified procedure, within the scope of a new liquidity provision agreement to allow members to act as liquidity providers on the bonds of their choice.

For more information, please consult our Liquidity Provider Procedure Brochure.