Montréal Exchange issued Circular 076-26 on Wednesday, launching a Request for Proposal for a market-making program on its 30-Year Government of Canada Bond Futures contract (LGB), with a scheduled program launch of September 1.
MX may select up to three Approved Participants, Foreign Approved Participants, or eligible clients with direct electronic access. Proposals are due June 26, with selected firms to be notified July 22 and agreements signed by August 21. The timeline is subject to change at MX’s discretion.
The incentive package includes transaction and clearing fee waivers, variable compensation drawn from a share of net transaction revenues, and a fixed monthly stipend. The program can run for up to five years.
Selected market makers must post minimum sizes at maximum spreads, or better, for a set percentage of time, with possible additional obligations around daily settlement and quarterly rolls.
The circular said “limited activity was observed” in the contract despite prior relaunch efforts in 2021 and a specification change in 2023, even as market feedback indicated the product remained viable. As of Wednesday evening, LGB open interest stood at 383 contracts.
MX separately filed proposed amendments on June 2 to modify the LGB’s delivery standards, notional coupon, and delivery period.
