Specialist, AdLP and MiFID II Market Maker
The liquidity of Exchange traded funds (continuous quoting prices and narrow bid-ask spreads) are guaranteed by the presence on the trading platform of three market making schemes:
Official specialist: provides liquidity by placing compulsory comparable bid and ask orders which respect a maxmium spread (percentage distance between bid and ask price) and a minimum countervalue. There can only be one Specialist for each ETF, ETC/ETN. The specialist is to be appointed by the relevant issuer.
Advanced Liquidity Provider: provides liquidity by placing comparable competitive bid and/or ask orders on their own account, which respect a maximum spread and minimum countervalue. There may be unlimited ADLPs per instrument. An entity can freely apply to be an ADLP for any instrument.
MiFID II Market Maker: provides liquidity by placing comparable competitive bid and/or ask orders on their own account, which respect a maximum spread and minimum countervalue. There may be unlimited MiFID II Market Makers per instrument.
From March 13th 2020 a new AdLP price discount has been introduced. The new version of the “Guide for Market Makers on ETFplus” is available at the following link
Specialist obligations are available in the following excel file*. Please note that size obligations refer only to Official Specialists, whereas size obligations for Advanced Liquidity Providers and MIFID II market makers are those stated in the Guide.
*The purpose of the excel file is informative, Borsa Italiana notices prevail.