Investment firms engaged in algorithmic trading and pursuing market making strategies on any LuxSE tradable instrument are required to enter into a Market Making Agreement with LuxSE by submitting a filled in Registration Form (see Documents section below).
If there is a liquid market for equities and ETFs, LuxSE offers Market Making Schemes.
As a reminder, Market makers (whether under a scheme or only under an agreement) will be required, amongst other things, to post firm, simultaneous two-way quotes of comparable size and competitive prices, and deal on their own account during at least half of the daily trading hours over a single calendar month period.
All our members acting as Market makers must complete the Registration Form thus confirming their understanding and acceptance of the General Terms and Conditions that apply to all instruments admitted to trading. All documents are available below.
Upon entering into the Market Making Agreement through the completion of the Registration Form, members are eligible to apply for a Market Making Scheme for each specific product individually, except where indicated otherwise.
For further details, please contact the Market and Surveillance (M&S) Department.
We have implemented a range of Market Making Schemes to comply with the MiFID II framework:
Market makers under the different Market Making Schemes or under the Agreement will be required to flag all relevant orders and quotes on the LuxSE Order Entry systems as follows:
In a situation of Stressed Markets Conditions (SMC), the obligation of the participant to provide liquidity on a regular and predictable basis under the Market Making Schemes, will be amended to double the spread requirements and half the size of obligations.
During SMC, market makers presence will continue to be monitored.
SMC are considered to arise, in relation to a financial instrument that is subject to a contractual Market Making Scheme with LuxSE and that is declared to be ‘liquid security’ by ESMA, in the following situations:
We will inform market participants of SMC market status via email.
Exceptional Market Circumstances (EMC)
|Extreme volatility||Happens when volatility halt is triggered for 50% of financial instruments traded on a segment in relation to which the obligation to sign a Market Making Agreement applies. It is manually triggered by the M&S Department in case of such an event. Duration: 60 minutes.|
|War, industrial action, civil unrest, cyber sabotage||The M&S Department triggers a management decision.|
|Disorderly trading conditions||Apply if half or more of the most active trading members (based on the number of trades) lose their connectivity. the M&S Deparment triggers a management decision.|
|Technological and risk management issues, or inability to hedge positions due to short selling ban||If a member immediately informs LuxSE about technical problems impeding him from processing Market Making activities, and these problems are justified, we may suspend the Market Making obligations.|
Under EMC, there will be no quoting obligations and the performance monitoring will be suspended.
In addition to the MiFID II Market Making framework, we will maintain Liquidity Provider Provisions on some specific instruments to accommodate product and participant requirements. These Liquidity Providers Provisions are not subject to the MiFID II framework.
All liquidity providers under the different Liquidity Provider Provisions will be required to flag all relevant orders and quotes on the LuxSE systems as follows:
All LuxSE members acting as Liquidity Providers must complete the Registration Form thus confirming their understanding and acceptance of the General Terms and Conditions that apply to all LuxSE instruments. All documents are available below.
For further details, please contact the Market & Surveillance (M&S) Department.