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Monday, April 16, 2007

Equity Trader Alert #2007 - 76
NASDAQ to Begin Select Market Maker Program on May 1, 2007

Please Route To: Head Traders; Technical Contacts; Compliance Officers

What you need to know:

  • NASDAQ is launching the Select Market Maker Program—designed to recognize market makers who offer the highest levels of quoting and execution quality in NASDAQ securities.
  • NASDAQ plans to release Select Market Maker designations to NASDAQ issuers in July of 2007, based on June data.
    • Market making firms will have a preview of whether they qualify for Select Market Maker designation in June of 2007, based on May data.

Whom you should contact: NASDAQ Market Sales at 800.846.0477

What is the Select Market Maker Program?
The Select Market Maker Program is designed to highlight the market making model of The NASDAQ Stock Market® by designating qualified market makers as "Select" on a stock-by-stock basis.

NASDAQ-listed companies will be able to see a list of the firms that meet certain pre-set quoting and trading standards in their stock. (Please note that the designations will be available to listed companies for their stocks only.) This designation will provide Select Market Making firms with additional marketing opportunities for corporate services, aimed directly at CEOs, CFOs and Investor Relations executives of NASDAQ-listed companies.

When does NASDAQ plan to launch the Select Market Maker Program?
Market makers will be able to see the first Select Market Maker designations in June of 2007, based on May data. The June designations will not be released to issuers, giving market makers time to adjust their quoting/trading behavior, if necessary. NASDAQ® will release the designations to NASDAQ issuers on July 1, 2007, based on June data.

What criteria are used to designate market makers as "Select"?
Market makers will be designated as "Select" on a stock-by-stock basis, based on the previous month’s performance. A firm must be a registered market maker in the given stock to qualify. In addition, the Select Market Maker designation will be based on various parameters:

  • Market maker’s quote relative to the National Best Bid or Offer (NBBO)
  • Time the market maker is quoting relatively close to NBBO
  • Market maker’s market share

Where can I find additional information?


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