BVB to introduce a new Market Maker program to improve the liquidity

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Bucharest Stock Exchange (BVB) will introduce as of the beginning of 2020 a pilot program for intermediaries that act or intend to act as Market Maker for shares, in order to enhance the liquidity of those shares. By participating in the program, they benefit of lower fees, discounts and, additionally, bonuses, if certain specific criteria are met.

Thus, BVB has redefined the Market Maker Program for shares, update which becomes effective starting with January 1st, 2020, the target being that the Market Making activity to reach at least 15% of the total shares trading activity.

The redefinition of the Market Maker Program envisages that the focus will be on quantitative versus qualitative parameters, as follows:

  • Flexibility of qualitative parameters: daily quotation parameters (minimum period for maintaining quotations in a trading session, maximum spread), elimination of the monthly compliance indicator regarding the number of sessions in a month
  • Reconfiguring the terms of the program, by including quantitative indicators:
    • Base terms – envisaging that the daily fulfillment of the quoting parameters for a share (minimum quotation period, maximum spread) will imply granting standard Market Maker fees for the trades made by a Market Maker on the House account in the main market REGS.
      • This set of terms is applicable for all shares within the Regulated Market
        Fee: 3bps/side
    • Additional terms – through which the discounts / bonuses are granted, given that the daily value traded on the House account (buy and sell) by a Market Maker on the respective share in the main market exceeds certain established value thresholds.
      Additional terms will be applied, as follows:

      • Exceeding the first value threshold (which involves granting discounts) – for all shares from the Program
        Fee: 0/ side
      • Exceeding the second value threshold (which involves the granting of bonuses) – for a pilot program of shares: Banca Transilvania (TLV), Romgaz (SNG), BRD-Groupe Societe Generale (BRD), Nuclearelectrica (SNN) and OMV Petrom (SNP).
        Bonus: 3bps/ side

 

The discounts / bonuses will be applied to the daily value total traded on the House account for the share envisaged, not just marginal for the difference that exceeds the related thresholds.

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