The NASDAQ OMX Group, Inc. says that it plans to turn its PSX market into a venue specializing in exchange-traded products, such as exchange-traded funds (ETFs).
The company said today that it will re-launch NASDAQ OMX PSX “in an effort to create the leading marketplace” for ETPs. The market is to switch to a price-time execution model, adopt new trading technology, and new pricing. It plans to re-launch in May, pending approval by the US Securities and Exchange Commission (SEC).
The exchange says that the PSX will give investors three different models for U.S. equity trading, including the NASDAQ Stock Market, NASDAQ OMX BX, and now, the PSX, for trading in an ecosystem designed specifically for ETPs.
In addition to the new execution model, and technology, it says that its market making programs will ensure committed liquidity is available “by offering superior economics to participants that meet quoting requirements on a per-security basis.” It also plans to introduce an innovative lead market maker program designed to narrow spreads and increase displayed size in ETP securities.
“We’re focused on delivering long-term value to investors by significantly broadening the asset classes we offer to our member firms, and the establishment of a pre-eminent marketplace for ETPs supports that effort,” said Eric Noll, executive vice president of transaction services US and UK at NASDAQ OMX. “PSX is a key piece of our larger strategy to better service the ETP industry with a platform designed to incent high-quality liquidity, market incentive programs and ETP-specific functionality.”