NYBOT Launches Market Maker Program

May 9, 2003 (PLANSPONSOR.com) - The New York Board of Trade (NYBOT) has launched a new Market Maker program for its New York Futures Exchange, Inc. (NYFE) equity index futures and options markets.

According to a news release, LaBranche Structured Products LLC and Susquehanna Investment Group, two of the specialist firms on the New York Stock Exchange (NYSE) and the American Stock Exchange (AMEX), have agreed to serve as market specialists and provide a liquid, orderly marketplace for the trading of futures and options based on two equity index products now trading at the NYFE, the NYSE Composite Index and the Russell 1000 Index of large cap US equities.

The two market specialists will also lead in the launch of two new NYFE futures products based on Russell’s US equity indexes.   According to the agreements, LaBranche will be the market specialist for the new NYSE Composite Index products and the Russell 1000 Growth Index products beginning Friday for the futures contract and May 16, 2003, for the options, and Susquehanna will be the market specialist for products based on the Russell 1000 and Russell 1000 Value Index beginning Friday, for both the futures and options contracts.  

The Market Maker Agreement requires the exchange-approved market specialist to continuously maintain a competitive two-sided market consisting of a current bid and current offer no wider than the bid-ask spread specified by the exchange.   The continuous presence of the market specialist provides reliable pricing and the necessary liquidity to support the business goals and trading strategies of institutional and individual investors.   In return, the market specialist will be entitled to a minimum percentage of open outcry trades.  

The designated market specialist must appoint and supervise two individuals to fill their Market Maker obligations on the trading floor.   Additionally, the market specialist’s representatives may only trade the firm’s proprietary account and must be willing to trade a minimum number of contracts set by the exchange.   The Market Specialist will file with the NYBOT Compliance Department a written description of its procedures to prevent the flow of information between the market specialist’s representatives and the market specialist’s employees and affiliates who are responsible for the execution of customer orders.