IEX Enhanced Market Maker Program

A Market Quality Incentive Program for IEX-listed Securities

The IEX Enhanced Market Maker (“IEMM”) Program offers a discount on qualifying executions for all symbols traded on IEX to Members that provide meaningful and consistent support to market quality and price discovery in IEX-listed securities by extensive quoting at and/or near the NBBO. IEX offers two IEMM tiers: Inside Tier and Depth Tier.

Obligations

A Member will be designated as an IEMM if they meet the following requirements at the conclusion of the month:

  1. The Member satisfies one or both of the following quoting requirements for each IEX-listed security:
    1. Inside Tier: Quoting at the NBBO for an average of 20% of the trading day.
    2. Depth Tier: Quoting at the greater of 1 MPV or 3 bps away from the NBBO (or more aggressive) for an average of 75% of the trading day.
  2. The Member is registered and meets the requirements of an IEX Market Maker in all securities listed on IEX.1

To support IEX Market Makers with their quoting obligations for registered securities, IEX offers a Market Maker Peg order type. Please see the IEX Market Maker Specification for additional details.

1 Supplementary Material .01 of IEX Rule 11.150 provides an exception to IEX Market Makers that provide documentation substantiating that such Member is unable to act as a market maker in one or more securities listed on IEX.

Benefits

In return for IEMMs meeting stringent market making requirements in IEX-listed securities, IEX will discount qualifying executions for all symbols traded on the Exchange. Executions at or above $1.00 that are not subject to the Crumbling Quote Remove Fee, Internalization Fee, or Auction Match Fee qualify for a 1 mil discount.

If an IEMM qualifies for both tiers, IEX will aggregate and apply the applicable discounts (e.g., a non-displayed execution will receive a 2 mil discount from the standard 9 mil fee). Members qualifying for the IEMM Depth Tier will receive an aggregate savings of $20,000 per month before the benefit is capped and the discount is no longer applied.

Qualifying IEMM Tier(s) Discount
Inside Tier 1 mil per share on qualifying executions
Depth Tier 1 mil per share on qualifying executions, until the $20,000 cap is reached, then no discount
Inside Tier and Depth Tier 2 mils per share on qualifying executions, until the $20,000 cap is reached, then 1 mil per share on qualifying executions

Calculation of the Quoting Requirements

At the end of the calendar month, IEX will calculate if an IEX Market Maker met one or both of the quoting requirements for each IEX-listed security by aggregating the time that one or more of a Member’s MPIDs was quoting each trading day that security was listed on IEX. The Exchange will provide daily reports of quoting behavior to IEX Market Makers.

For the purposes of calculating the quoting requirements, a quote is a displayed order entered in a principal capacity of at least one round lot resting on the continuous order book during Regular Market Hours.

Inside Tier

The NBBO Quoting Percentage is calculated as follows:

((NBB Quoting Time + NBO Quoting Time) / 2) / (Regular Market Hours – Time Security is Halted) ≥ 20%

  • NBB Quoting Time: aggregate amount of time quoting at the NBB
  • NBO Quoting Time: aggregate amount of time quoting at the NBO
  • Regular Market Hours: aggregate amount of time between the start and end of Regular Market Hours, usually 9:30 a.m. – 4:00 p.m. Eastern Time (“ET”)
  • Time Security is Halted: aggregate amount of time that a security is subject to a halt or pause in trading pursuant to IEX Rule 11.280

Note that a firm can quote at the NBB 40% of the time or be on both the NBB and NBO 20% of the time, or some combination, so long as the average of the time at the NBB and NBO is at least 20%.

Depth Tier

The Depth Quoting Percentage is calculated as follows:

((Bid Depth Quoting Time + Offer Depth Quoting Time) / 2) / (Regular Market Hours – Time Security is Halted) ≥ 75%

  • Bid Depth Quoting Time: aggregate amount of time quoting at the greater of 1 MPV or 0.03% away from the NBB (or more aggressive)
  • Offer Depth Quoting Time: aggregate amount of time quoting at the greater of 1 MPV or 0.03% away from the NBO (or more aggressive)
  • Regular Market Hours: aggregate amount of time between the start and end of Regular Market Hours, usually 9:30 a.m. – 4:00 p.m. ET
  • Time Security is Halted: aggregate amount of time that a security is subject to a halt or pause in trading pursuant to IEX Rule 11.280

Note that a quotation at the NBB (NBO) counts towards a firm’s NBB (NBO) Quoting Time, as well as the Bid (Offer) Depth Quoting Time.

Download IEMM Program as PDF