Nasdaq Tweaks Rewards for Smooth-Trading Liquidity Providers
Published Date: 3/23/2026
Notice
Summary
Nasdaq is updating its programs that reward traders who help keep the market smooth and fair for Exchange-Traded Products (ETPs). They’re tweaking how they measure trader performance, explaining some rules more clearly, and changing how new products get included. These changes kick in right away and could affect traders aiming for rewards in these programs.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
DLPs no longer forced to meet auction spreads
If you are a Designated Liquidity Provider (DLP), you still must meet 5 of the 7 Market Quality Metrics to get incentives, but the rule now says the Auction Spread metrics (opening and closing) do not have to be among those five. All numeric thresholds in the metrics stay the same.
MQSs need only 2 of 4 metrics
If you are a Market Quality Supporter (MQS) for Low Volume ETPs, you now must meet 2 of the 4 Market Quality Metrics (instead of all 4) to qualify for the MQS stipend. MQSs that meet the MQMs receive a $175 per month stipend in the qualifying ETP.
Extended automatic incentives for new ETPs
For newly allocated or newly launched ETPs, a DLP or MQS will automatically be eligible to receive the applicable rebate, stipend, or Tier 5 incentive for the current month and the immediately following month. The rule also removes obsolete references to December 2025.
Auction spread measurement clarified
The rule clarifies that Auction Spread (opening and closing) is measured against the Nasdaq Market Center best bid and offer (QBBO) directly before each auction. For example, for Investment Strategy Group A opening auctions, the Exchange will check whether the participant has $37,500 notional depth within 105 basis points of the QBBO and a bid-ask spread no wider than 105 basis points directly before the opening auction.
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