The TSX Group Inc. has unveiled its plans for enhancements to its market making performance management system. The exchange says it will begin implementing the enhancements this July.

TSX says it recognizes that market making service levels, such as spread goals and minimum guaranteed fills, must be updated to reflect current market developments and trading patterns. Spread goal attainment evaluates to what degree a market maker is maintaining a two-sided market in a security. Market makers achieve a higher score the more narrow the natural spread in the market for such security in relation to the spread goal.

To achieve this objective, TSX has developed an internal automated information system to assist its staff in determining relevant monthly and quarterly spread goals. “In this regard, this new system simply augments the current service level target setting process, and does not change the interaction between TSX staff and market makers in the establishment of service levels,” it says.

TSX says that service level targets will be communicated to each market making firm’s designated contact on the sixth trading day of every month.

These service level targets will form the basis for negotiating the market marker’s service levels with respect to their security assignments. Spread goal targets will become effective on the 10th trading day of each month commencing July 15. Quarterly targets will become effective on the 10th trading day of each month commencing no earlier than October 14.

Market markers are expected to keep apprised of their applicable service levels to meet their performance obligations. The first set of service level targets will be communicated on July 9.