The primary responsibility of a liquidity provider is to ensure the continuous provision of liquidity within the order book of the trading system.
Liquidity providers on the Wiener Börse undertake to supply binding bid and ask quotes for a security in the Xetra® T7 order book. The quotes must comprise a certain minimum size on both the bid and ask side and be offered within a defined (minimum) time while complying with a maximum permissible spread.
By providing liquidity and offsetting imbalances between bid and ask orders in the order book, liquidity providers contribute to price stabilization, especially in times of volatility. This also increases the likelihood that orders from all investors can be executed.
All trading participants on the Wiener Börse can become liquidity providers by entering into a quotation obligation (= a contract with the Wiener Börse that includes, among other things, the quotation parameters such as the maximum spread) for a security. The Wiener Börse monitors the activities of liquidity providers and incentivizes them when they fulfill their quotation obligations by granting them reduced transaction fees.
Continuous Trading with Auctions
In this trading procedure, there can be up to three different liquidity providers for each instrument:
Market Maker
Market makers are trading participants who provide binding bid and ask prices in securities trading. Any trading participant may become a market maker by entering into a binding quotation obligation a security. There may be more than one market maker per instrument.
- Market segment: equity market (prime market / standard market / direct market (plus) / global market), bond market (public sector, corporates prime / standard, financial sector), structured products (ETF)
- Time period1: Ø ≥ 80% of the daily observation period (9:00 a.m. to 5:30 p.m.) in a calendar month
- Minimum Size: € 7.500 - € 35.000 or at least € 10.000 nominal value (depending on market segment and liquidity class)
- Maximum Spread: 0.65% - 5% or 500 bp fixed (depending on market segment and liquidity class)
1 For equities on the global market and exchange traded funds, a value of ≥ 50% or, if the share of its market maker turnover in the total turnover of the financial instrument in question is at least ≥ 40% in double counting, ≥ 25% must be achieved.
MiFID Market Maker
Trading participants who engage in algorithmic trading in a security to pursue a market-making strategy according to RTS 8 Article 1 of Delegate Regulation (EU) 2017/578 and shall apply becoming a MiFID Market Maker on Wiener Börse. They are also subject to minimum requirements in terms of time, spread, and quantity, which are, however, lower than those for market makers. There may be more than one MiFID market maker per instrument.
ATX Basket (all stocks included in the ATX)
- Time period: Ø ≥ 5 – 20 % of the daily observation period (9:00 a.m. to 5:30 p.m.) in a calendar month
- Minimum Size: € 2.000 - € 5.000
- Basis: 80% of the stocks in the ATX basket are included in the observation
Non-ATX Basket (all stocks listed on the prime market but not included in the ATX)
- Time period: Ø ≥ 5 – 20 % of the daily observation period (9:00 a.m. to 5:30 p.m.) in a calendar month
- Minimum Size: € 1.000 - € 2.500
- Basis: 60 % of the stocks in the Non-ATX basket are included in the observation
In specific market situations (e.g., high market volatility, stressed market conditions, exceptional circumstances), the Wiener Börse may temporarily waive or reduce the quotation obligation for liquidity providers.
Auction and Continuous Auction
In these trading procedures, instruments can also have (a) liquidity provider(s):
- Liquidity providers in trading procedure Auction
- Liquidity providers in trading procedure Continuous Auction
