Nasdaq Boosts Rewards for Market Quality Heroes in New Program
Published Date: 10/2/2025
Notice
Summary
Nasdaq is updating its pricing rules to boost trading quality starting November 1, 2025. They’re improving the Designated Liquidity Provider program and launching a new Market Quality Supporter program, which affects traders who help keep the market smooth. These changes could impact fees and incentives, encouraging better trading behavior on Nasdaq.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 1 costs, 2 mixed.
One DLP Per ETP; Secondary Rebates Removed
Starting November 1, 2025, Nasdaq will limit Designated Liquidity Providers (DLPs) to one DLP per Qualified Security and will eliminate Secondary DLP rebates and the Primary/Secondary distinction. If you currently serve as a Secondary DLP, the rule change removes the separate Secondary DLP rebate structure.
Higher Monthly Stipends for Low-Volume DLPs
Nasdaq raises fixed monthly DLP stipends for lower-volume ETPs (operative November 1, 2025): Tier 3 increases to $350/month, Tier 4 to $450/month, and Tier 5 to $500/month. Tiers 1 and 2 per-executed-share rebates remain $0.0034 and $0.0040 per executed share, and new launches will automatically get the Tier 5 $500 stipend for their first month.
New Low-Volume Strategy Groups and MQMs
Nasdaq creates a 'Low Volume' group (ETPs with prior-month ADV ≤ 1,000,000) and segments these into Investment Strategy Groups A–C by two-year average NBBO spread: Group A ≤15 bps, Group B 16–28 bps, Group C ≥29 bps. DLP Market Quality Metrics (MQMs) are revised (e.g., time at NBBO requires a minimum $5,000 notional, spreads and average notional depth targets differ by group) and DLPs must meet 5 of 7 MQMs including auction spread metrics to qualify.
Reworked Tape C Incentives and Thresholds
Nasdaq updates the additional Tape C ETP incentives: it raises the minimum monthly average number of assigned Tape C ETPs required per tier to 20, 35, 75, 135, and 200, and sets incremental Tape C rebates per executed share at $0.00025, $0.00035, $0.00040, $0.00045, and $0.00055 for Tiers 1–5 respectively. Eligibility requires meeting notional depth and spread MQMs.
New MQS Program: Up to Three Supporters
Nasdaq creates a Market Quality Supporter (MQS) program effective November 1, 2025 that allows up to three MQSs per Low Volume ETP; MQSs need not be registered market makers. An MQS that meets MQS metrics will receive a fixed stipend of $175 per month for each assigned ETP's MPID, in addition to other rebates or fees.
Prior-Month Basis for Tier Calculations
Nasdaq will calculate pricing tiers for DLP rebates and MQS stipends based on prior-month activity instead of the current month, and will automatically make new DLP/MQS allocations eligible for the relevant rebate or stipend in the allocation/launch month (new launches get the Tier 5 stipend). These changes take effect November 1, 2025.
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