NYSE Euronext To Launch Retail Liquidity Program

05/07/2012

NYSE Euronext (NYX) has received approval from the U.S. Securities and Exchange Commission (SEC) to establish a first-of-its-kind Retail Liquidity Program, a market innovation that produces cost savings for individual investors through price improvement on retail equities trading order flow for New York Stock Exchange (NYSE) and NYSE MKT listed and NASDAQ UTP-traded equity securities.

The Retail Liquidity Program is complementary to existing marketplace offerings for retail investors and is intended for use by retail brokerage firms directly and market intermediaries that service retail order flow providers. NYSE Euronext expects to activate the RLP on both the NYSE and NYSE MKT markets on Aug. 1, 2012.

“The Retail Liquidity Program is an attractive trade execution alternative for individual investors,” said Joseph Mecane, Executive Vice President, NYSE Euronext. “Providing price improvement for retail orders within an exchange environment affords individual investors new economic incentives and ensures greater transparency, liquidity and competition throughout the U.S. cash equities marketplace.”

The new program will establish two new classes of market participants on NYSE and NYSE MKT:

  • Retail Liquidity Providers (“RLPs”), which would be required to provide price improvement (“Retail Price Improvement Orders”) for certain retail order flow (“Retail Orders”) in the form of interest that is better than the best protected bid or the best protected offer (“PBBO”). Similar to our other dedicated liquidity provider programs, RLPs would receive certain economic benefits in exchange for meeting performance obligations; and
  • Retail Member Organizations (“RMOs”), which would be eligible to submit Retail Orders to the Exchange.

Member organizations other than RLPs are also permitted to submit Retail Price Improvement Orders. The electronic Retail Liquidity Program requires participants to improve the PBBO by a certain minimum increment, benefiting the retail investor’s execution price.

The related rule filings for NYSE and NYSE MKT listed and UTP traded securities, respectively, can be found at: