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NYSE Euronext and GETCO LLC, a global electronic trading and technology firm, today announced that GETCO is expected to become a New York Stock Exchange (“NYSE”) designated market maker (“DMM”), and that GETCO has purchased approximately 350 NYSE DMM assignments from Barclays Capital. Financial terms of the transaction were not disclosed.
GETCO is a supplemental liquidity provider on NYSE, a lead market maker on NYSE Arca, and will be a DMM on the NYSE and NYSE Amex. The firm is a leading global liquidity provider in more than 30 markets in North America, Europe and Asia; a registered market maker on the NASDAQ and BATS exchanges; and is among the top five participants by volume on NYSE Arca, NYSE Arca Options, NYSE Liffe US , CME, Eurex, and various other equities, futures and options markets.
To ensure a smooth transfer of responsibility, GETCO is working closely with Barclays Capital and the NYSE. Barclays Capital will continue serving GETCO’s NYSE-listed DMM clients over a period during which GETCO will complete the process of incorporating NYSE DMM-specific infrastructure into its trading platform. The transfer of these issues will maintain diversity among DMM firms and NYSE-listed companies, as announced when Barclays Capital acquired LaBranche & Co. LLC’s DMM business last month.
“GETCO brings to this new role its strong performance as an NYSE supplemental liquidity provider and NYSE Arca lead market maker, and its exceptional track record of market-making expertise and technology,” said Lawrence Leibowitz, NYSE Euronext Chief Operating Officer and Head of U.S. Markets. “Having GETCO become a designated market maker in NYSE-listed issues and in our upcoming trading of Nasdaq issues on the NYSE Amex platform clearly reflects a vote of confidence in the value of our market model for our issuer, investor and trader communities.”
“GETCO is committed to promoting stable and efficient markets as a global market maker and liquidity provider,” said Dave Babulak, Managing Director of GETCO Securities. “Serving as a designated market maker for NYSE listed companies is an important priority for us. Our clients will receive the same high level of market insight, service and professionalism they expect from the NYSE’s market model, supported by GETCO’s deep global liquidity and proven, market-leading technology.”
DMMs are at the center of the NYSE’s unique high-tech/high-touch market model, and have obligations to maintain an orderly market, quote at the National Best Bid and Offer (NBBO) and facilitate price discovery during openings, closings and imbalances. DMMs are among the most active trading firms on the NYSE, accounting for an aggregate 9% of NYSE volume in the fourth quarter of 2009, up from 4% in September 2008, prior to the rollout of NYSE’s new market model. In the fourth quarter of 2009, DMMs quoted at the NBBO 43% of the time, DMMs represented 18% of the NYSE quote size at the NBBO, and 89% of DMM volume traded was liquidity providing (versus liquidity removing).
