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How does market making work?

Each day the ETF issuer publishes the list of securities that make up the ETF or ETP, enabling market makers to calculate the net asset value (NAV) of the ETF throughout the trading day. This helps market makers to more accurately price the ETFs. They place a 'spread', which is their return, around the NAV, resulting in:

  • a bid price, at which they will buy ETFs, and
  • an offer price, at which they will sell ETFs.

They then place these prices on ASX for investors to trade with. This spread will vary throughout the trading day.

The appointed market makers receive incentives from ASX when making markets in accordance with the applicable market making specifications. The market making specifications include a minimum time period for making markets under the scheme, as well as a minimum liquidity requirement. There is also a limit on the maximum spread between the bid and offer price that a market maker can quote when making markets under the scheme.

The schemes recognise that there will be certain circumstances when the appointed market makers cannot reasonably be expected to make markets in accordance with the market making specifications.

You generally pay a little more to buy ETFs than you would receive for selling ETFs at any given time. The width of the spread can vary between different ETFs. For some heavily traded ETFs the offer may be only a couple of cents higher than the bid, while for less liquid ETFs the spread may be wider.

Market makers have an important role in ensuring that buyers and sellers can transact in markets. Market makers receive incentives from ASX when making markets in accordance with the market making specifications under the applicable schemes. The specifications set out below are a summary of select terms in the market making incentive agreements between ASX and relevant maker makers, and are not intended to be a definitive or comprehensive summary of those agreements.

ASX does not incentivise ETPs with internal market making arrangements. ETPs that use internal market making are generally noted with “N/A” in the table below. For specific information about the risks associated with internal market making, please refer to ‘Fund Specific Risks’ here.

*All references to time are to Australian Eastern Standard Time or Australian Eastern Daylight Time (as applicable) unless otherwise stated.

Please click here to learn more about market making arrangements.

Quoting schedules

ETP Code Quoting Schedule BNP Paribas Susquehanna UBS Jane Street Nine Mile Financial Citi Flow Traders
A200 1  ✔  
AQLT 2            
EINC N/A              
EX20 2  ✔      
GRNV 3        
INIF N/A              
IOZ 1  
ILC 1    
ISO 3  
MVW 1        
MVS 3          
QOZ 1      
RINC N/A              
SMLL N/A              
STW N/A*        
SFY# 1      
SSO 3          
VAS 1  
VLC 1      
VSO 3    
ETP Code Quoting Schedule BNP Paribas Susquehanna Jane Street Nine Mile Financial Citi
ATEC 2    
BNKS          
MVA 2    
MVB 2      
MVE 2    
MVR 2      
OZF 2    
OZR 2  
QFN 2    
QRE 2    
RINC N/A          
SLF# 2  
VAP 2
ETP code Quoting schedule BNP Paribas Susquehanna UBS JPMorgan Jane Street Nine Mile Financial Citi
AASF N/A              
AUMF 3  ✔    ✔  ✔
AUST 2            
BBOZ 2        
BEAR 1        
DBBF 2            
DGGF 2            
DHHF 2            
DVDY 3          
DZZF 2            
E200 3        
EIGA N/A            
EINC N/A              
FAIR 3  ✔  ✔    ✔
FDIV 2            
GEAR 2        
GIVE N/A              
GOAT 4            
HVST 1          
IESG 3   ✔       
IHD 2   ✔  ✔ 
IIGF N/A              
IMPQ N/A              
INES N/A              
KSM N/A              
MAAT N/A              
MVOL 3      
RARI 3          ✔
RDV 3          ✔
SELF 1        
SNAS 1          
SWTZ N/A              
SYI 3        ✔
VETH 3    ✔  ✔
VHY 2      ✔  ✔
YMAX 1        
ZYAU 1          ✔
ETP Code Quoting Schedule BNP Paribas Susquehanna JPMorgan Jane Street Nine Mile Financial Citi Flow Traders
ADEF N/A              
AESG 4          
AGX1 N/A              
AUDS 2            
BBUS 1        
CETF 3          
CNEW 3          
CURE 4            
DBBF 2          
DGGF 2          
DHHF 2          
DVDY 3            
DZZF 2          
EMKT 3          
EMMG 3              
ERTH 3        
ESGI 3          
ESTX 2      
ETHI 3     ✔   
F100 3    
FATP N/A              
FEMX N/A              
FUTR 4            
GGUS 1        
GLOB N/A              
GOAT 4          
GROW N/A              
HETH 3      
HEUR 3      
HGEN 3            
HJPN 3    
HNDQ 2        
HQLT 3            
HYGG N/A              
IAA 3      
IBAL 2          
ICOR 4 ✔     ✔      
IDEA N/A              
IEM 3    
IESG     ✔   
IEU 3      
IGRO 2          
IHOO 2        
IHVV 1      ✔  
IHWL 3   ✔   
IIFG N/A              
IIND 4          
IJH              
IJH 3      
IJP 3      
IJR            
IJR 4    ✔      
IKO 4    
ILB 4            
INCM 3        
IOO            
IOO 3        
ITEK 3            
ITW 3            
IVE 4      
IVV 1    ✔  
IWLD 3   ✔     
IYLD 4            
IZZ 3    
KII N/A              
LPGD N/A              
LSGE N/A              
MAET N/A              
MCGG N/A              
MGOC N/A              
MHG N/A              
MHHT N/A              
MICH N/A              
MKAX N/A              
MOAT 4          
MOGL N/A              
MSTR 2            
MTAV 3            
MVOL 3            
NDIA 3            
NDQ 2    
NNUK N/A              
PAXX N/A              
PIXX N/A              
QHAL 3      ✔      
QLTY 3       ✔   
QMIX 1            
QSML 3          
QUAL 3      ✔ ✔     
QUS 3      
RCAP N/A              
SEMI 3        
SPY 1          
STW 1            
UMAX 2          
USD 1            
VAE 4  ✔    
VDBA 2  ✔  ✔    
VDCO 2  ✔  ✔    
VDGR 2  ✔  ✔    
VDHG 2  ✔  ✔    
VEQ 3      
VESG 2  ✔    
VEU 2        
VGAD 2      
VGE 3      
VGMF 2    ✔  ✔    
VGS 1   ✔   
VISM 3  ✔ ✔     
VLUE 2          
VMIN 2    
VNGS N/A              
VTS 2        
VVLU 2    
WCMQ N/A              
WDIV 4          
WDMF 3      
WEMG 3          
WRLD 2            
WVOL 3   ✔     
WXHG 2            
WXOZ 2          
YANK 2            
ZYUS 2          
ETP Code Quoting Schedule BNP Paribas Susquehanna JPMorgan Jane Street Nine Mile Financial Citi Flow Traders
ACDC 4   ✔       
ADEF N/A              
ASIA 3     ✔   
BNKS 3        
CLDD 3      
CLNE 3        
CORE 4          
CURE 4            
CRYP 3        
DJRE 4          
DRIV 3          
DRUG 3      
EDOC 3          
ERTH 3            
ESGI 3          
ESPO 4     ✔       
FANG 2      
FDEM N/A              
FOOD 3        
FUEL 3      
GAME 3          
GDX 4        
GPEQ 2          
HACK 4    
HGEN 3        
HLTH 4          
IBAL 2            
IBUY 3          
IFRA 2          
IGRO 2            
IPAY 4        
ITEK 3            
IXI 4      
IXJ 4      
JZRO 4            
LNAS 1        
MCCL N/A              
MNRS 3      
NDQ 2        
MTAV 3            
NDIA 4            
RBTZ 3     ✔     
REIT 3       ✔     
ROBO 4          
SEMI 3          
SNAS 1          
TECH 4          
VBLD 3  ✔ ✔     
ETP code Quoting schedule Susquehanna Citi
AUDS 2  
EEU 1
POU 1
USD 1
YANK 2  
ZUSD 1  
ETP code Quoting schedule BNP Paribas Susquehanna JPMorgan Jane Street Nine Mile Financial Citi Flow Traders
AAA 1      
AESG 4            
AGVT  3        
BILL 1      
BOND 4      
BNDS 4        
CRED 4      
BHYB 4          
DHOF  5            
EBND 4            
FLOT 4        
GBND 4            
GCAP 4            
GOVT 4      
GGOV 4        
HBRD N/A              
IAF 4
ICOR 3        
IGB 4
IHCB 4    
IHEB 4    
IHHY 4    
ILB 4    
ISEC 1      
IYLD 3        
OBZD 4          
OZBD 4          
PLUS 4        
QPON 4        
RGB 4      
RSM 4      
RCB 4      
SUBD 3        
USHY 4            
USTB 4            
VACF 4  
VAF 4  
VBND 4  
VCF 4  
VEFI 2      
VGB 4  
VIF 4    
XARO 4          
ETP code Quoting schedule Challis
YTMAGL RB
YTMALD RB
YTMANZ RB
YTMAPA RB
YTMAP1 RB
YTMAST RB
YTMAS2 RB
YTMAWC RB
YTMAZJ RB
YTMBH1 RB
YTMCCA RB
YTMCTX RB
YTMDO1 RB
YTMDO2 RB
YTMDOW RB
YTMDX1 RB
YTMDX2 RB
YTMDX3 RB
YTMF13 RB
YTMF14 RB
YTMF15 RB
YTMF16 RB
YTMF17 RB
YTMGPT RB
YTMGP1 RB
YTMIP1 RB
YTMIPL RB
YTMLLC RB
YTMLL1 RB
YTMMGR RB
YTMMG2 RB
YTMMQ1 RB
YTMMQG RB
YTMNA1 RB
YTMNAB RB
YTMNVN RB
YTMORG RB
YTMQF1 RB
YTMQF2 RB
YTMQF3 RB
YTMQF4 RB
YTMSCG RB
YTMSCP RB
YTMSGP RB
YTMSG1 RB
YTMSG2 RB
YTMSG3 RB
YTMTCL RB
YTMTLS RB
YTMTL1 RB
YTMTL2 RB
YTMVCX RB
YTMVC1 RB
YTMWB1 RB
YTMWBC RB
YTMWES RB
YTMWE1 RB
YTMWOW RB
YTMF04 RB
YTMF05 RB
YTMF06 RB
YTMF07 RB
YTMF08 RB
YTMF09 RB
YTMF10 RB
YTMF11 RB
ETP code Quoting Schedule Jane Street Flow Traders Susquehanna Nine Mile Financial Flow Traders
ETPMPM RB/4  ✔      
ETPMPT RB/5  ✔      
ETPMAG RB/3  ✔  
ETPMPD RB/5  ✔      
GOLD 1  ✔  
OOO 3    
PMGOLD RB        
QAG 4        
QAU 1  
QCB 5        

Requirements by schedule

Bid Price in $AUD Maximum Spread Minimum Quantity
Schedule 1
<$5 2c $50,000
>$5 40bps $50,000
Schedule 2
<$5 3c $30,000
>$5 60bps $30,000
Schedule 3
<$5 5c $25,000
>$5 1% $25,000
Schedule 4
<$5 7c $20,000
>$5 1.50% $20,000
Schedule 5
<$5 10c $17,500
>$5 2% $17,500
Bid Price in $AUD Maximum Spread Minimum Quantity
Schedule 6
<$5 12c $15,000
>$5 2.50% $15,000
Schedule 7
<$5 17c $12,500
>$5 3.50% $12,500
Schedule 8
<$5 25c $10,000
>$5 5% $10,000
Schedule 9
<$5 37c $7,500
>$5 7.50% $7,500
Schedule 10
<$5 50c $5,000
>$5 10% $5,000

Description of quoting specifications for Market Makers

Minimum % of time to maintain two-way quotes

80% of the time from 10:15 until commencement of the Pre-CSPA (Closing Single Price Auction) Session State (generally 16:00) on any trading day.

Maximum Spread (Being the offer price less the bid price

The maximum spread referred to in schedules 1-10 above is based on the relevant Bid price in $AUD.

Minimum Quantity of Products in each bid and offer ($AUD)

The minimum quantity for Products referred to in schedules 1-10 is based on the Bid price for the bid quantity and Offer price for the offer quantity in $AUD.