BATS Global Markets today announced plans to introduce a Retail Price Improvement (RPI) program to its BYX Exchange as a one-year pilot program, subject to approval by the U.S. Securities and Exchange Commission (SEC).
The BATS RPI program is designed to provide material price improvement for retail orders sent to the BYX Exchange by executing incoming retail orders against retail price improving orders and all other liquidity that improves upon the national best bid or offer.
The program creates a new class of market participants called Retail Member Organizations (RMOs) that are eligible to submit retail orders (ROs). All BYX Exchange Members may certify to submit RPI orders that offer price improvement in $.001 increments to retail orders submitted by RMOs.
The program uses a strict price/time priority model and executes retail orders at multiple price levels to achieve maximum price improvement for retail orders.
"At the core of our RPI program is a unique competitive dynamic, one that we believe will encourage active and broad participation among our many diverse exchange members," said Joe Ratterman, chief executive of BATS Global Markets. "Our goal with the RPI program is to provide consistent and meaningful price improvement for retail investors, which in turn can enhance the overall trading experience for all of our participants."
To qualify as an RMO, members must conduct a retail business or handle retail orders on behalf of another broker-dealer. All NMS securities priced at $1.00 and higher will be available in the RPI program on the BYX Exchange.
More information about the BATS RPI program and guidelines for applying to become an RMO on the BYX Exchange is available at www.batstrading.com.
ROs and RPI orders may only be entered by BYX Exchange members that have completed the appropriate certification with the BATS Trade Desk. Contact the BATS Trade Desk for more information regarding RO and/or RPI order certification.