TSX Market Making Program Guide Responsibilities of Market Makers TMX Group Page 11 Chapter 3 Responsibilities of Market Makers 3.1 ETFs 3.1.1 Performance Obligations - ETFs The performance obligations of ETF Market Makers are measured under the following scoring system. Points are awarded to Market Makers for each of the following three performance criteria (each, an “ETF Performance Obligation”), and an overall performance score is calculated based on the average of the three scores, weighted equally. A score of 60 is considered a passing score for the month. Note that there is only a single Market Maker assigned to an ETF. 1. Spread Goal Attainment Spread goal attainment evaluates to what degree a Market Maker is maintaining a twosided market in a security relative to their spread goal obligation. Market Makers achieve a higher score based on how narrow the natural spread in the market for such security is in relation to the spread goal. Spread goal attainment = average time weighted spread (“ATWS”) Ratio/Spread Goal (“SG”). Spread Goals are calculated as the ATWS for the previous 3 months times 2, and are communicated to Market Makers at the beginning of each month. Points are awarded as follows: Spread Ratio Ranges Points Awarded ATWS Ratio ≤ 50% of SG 125 50% < ATWS Ratio ≤ 57.5% of SG 100 57.5% < ATWS Ratio ≤ 65% of SG 75 65% < ATWS Ratio ≤ 80% of SG 50 80% < ATWS Ratio ≤ 110% of SG 25 ATWS Ratio >110% of SG 0 Demerit points are subtracted from the spread goal attainment score based on the number of spread goal exceptions or the average duration of the spread goal exceptions. A total of 25 demerit points is deducted for violation of either limit. 2. Participation Participation measures the degree to which a Market Maker is trading actively in its securities of responsibility to improve its trading liquidity for the benefit of the
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