Nasdaq will start a market dedicated to exchange-traded funds and index-linked notes. The Nasdaq ETF Market will open in the third quarter, according to a Nasdaq news release. The exact date is not yet determined.
The Nasdaq ETF Market model will be based on Designated Liquidity Providers, a market-maker that will maintain liquidity in specific ETFs and will support new ETF listings by maintaining tight spreads and quoting often at the best national best bid-offer. In return, DLPs will receive price incentives to support ETFs during their initial listing. Floor-based specialists will also be allowed to quote in the Nasdaq ETF market.
Nasdaq already handles a majority of U.S. ETF volume, with 54.1% of overall volume in May.
