COB 9.6.8

(1) An ATS Operator must not introduce a liquidity incentive scheme unless:

(a) participation of such a scheme is limited to:
(i) a member as defined in Rule 9.3.1(1); or
(ii) any other Person where:
(A) it has undertaken due diligence to ensure that the Person is of sufficient good repute and has adequate competencies and organisational arrangements; and
(B) the Person has agreed in writing to comply with its Operating Rules so far as those rules are applicable to that Person'sactivities; and
(b) it has obtained the prior approval of the DFSA.

(2) For the purposes of this section, a “liquidity incentive scheme” means an arrangement designed to provide liquidity to the market in relation to Investments traded on the facility.

(3) Where an ATS Operator proposes to introduce or amend a liquidity incentive scheme, it must lodge with the DFSA, at least 10 days before the date by which it expects to obtain the DFSA approval, a statement setting out:

(a) the details of the relevant scheme, including benefits to the ATS and members arising from that scheme; and
(b) the date on which the scheme is intended to become operative.

(4) The DFSA must within 10 days of receiving the notification referred to in (3), approve a proposed liquidity incentive scheme unless it has reasonable grounds to believe that the introduction of the scheme would be detrimental to the facility or markets in general. Where the DFSA does not approve the proposed liquidity incentive scheme, it must notify the ATS Operator of its objections to the introduction of the proposed liquidity incentive scheme, and its reasons for that decision.

(5) An ATS Operator must, as soon practicable, announce the introduction of the liquidity incentive scheme, including the date on which it becomes operative and any other relevant information.

(6) If the DFSA decides not to approve a liquidity incentive scheme, the ATS Operator may refer the decision to the FMT for review.

[Added] DFSA RM123/2013 (Made 13th June 2013) [VER22/07-13]
[Amended] DFSA RM175/2016 (Made 10th February 2016). [VER26/04-16]