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.