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"We are redefining our existing market making capabilities to provide enhanced liquidity to the benefit of both corporate issuers and investors," said Mike Cormack, President of Archipelago. "Additionally, our market making functionality is linked to our electronic best execution model ensuring that better priced orders on the ArcaEx book or in the national market are not overlooked. Displayed limit orders will retain standing on a price and time priority basis."
By protecting best prices on all markets, ArcaEx's program will not only enable clients to achieve enhanced execution quality, but also ensure compliance with the trade-through protections approved by the SEC in Regulation National Market System (also known as Reg NMS) to be implemented in April 2006.
Proposed changes to existing market making capabilities include enhancements to ArcaEx's current Directed Order Process and the addition of a Lead Market Maker for stocks with a primary listing on the Pacific Exchange for trading on ArcaEx. Orders executed within the Directed Order Process are free of an ArcaEx charge for both the order sending firm and the Designated Market Makers. Market makers will have the ability to provide price improvement by using ArcaEx's existing order types and will receive automated protection of trade throughs against the ArcaEx displayed limit order book.Additionally, on a monthly basis, ArcaEx will provide issuers and market makers with reporting tools to analyze the quality of markets and trading activity for each Designated Market Maker registered in its symbol (s).
