Liquidity Agreement Finance

(f) how to deal with inconsistencies in the balance of shares or liquidity that could jeopardize the liquidity contract; The liquidity of assets in the market affects their prices and expected returns. Theoretical and empirical evidence indicates that investors need a higher return on assets with lower market liquidity to offset the higher costs of trading these assets. [7] In other words, for a given cash-flow asset, the higher the market liquidity, the higher the price and the lower the expected return. In addition, risk-averse investors need a higher expected return when the liquidity risk in the asset market is higher. [8] This risk includes the risk of return on asset returns relative to shocks in the overall liquidity of the market, the risk of the asset`s own liquidity relative to market liquidity shocks, and the impact of market returns on the equity liquidity of the asset. Again, the price applies, the higher the liquidity risk, the higher the expected return on the asset or the lower return. [9] All shares acquired by FI on the market for the performance of the contract are transferred for this purpose to an account in the name of the issuer and contain equity – the scheme provided for by the trading company code applies to these shares and, according to the same code, the liquidity contract cannot exceed the threshold of 10% of equity equity. There are a number of ratios that measure accounting liquidity, which differ by the strict definition of „liquid assets.” Analysts and investors use it to identify companies with high liquidity. It is also considered a measure of depth.

(h) IF`s declaration of responsibility to ensure that the liquidity contract is executed by the same Member State independently of any other activity related to its own portfolio activity, trading on behalf of a third party and discretionary management of clients` portfolios; (ii) the amount paid under the liquidity contract during the last 60 minutes of the trading meeting may not exceed 30% of the total amount of the remaining trading period; The principle of exclusivity must be respected, so that only one active liquidity contract per stock class and for each IF is possible. In addition, a new contract cannot be entered into with the same IF or another unless the previous contract is terminated. However, IF`s objective is not to centralize purchases and sales, and its absence from the market is advantageous in times when investors act with the required regularity. All offers that are not executed for the purpose of executing the liquidity contract and that are not the result of or increasingly the FI`s own portfolio transactions are considered independent by THE FI by discretionary management in third-party portfolios. Before negotiating under the liquidity contract, the issuer must, as essential information, disclose the details of the contract with the financial intermediary on the following information: (i) the identification of the intermediary; (ii) the liquidity and securities made available to the financial intermediary; (iii) the maximum amount of shares that can be accumulated in the portfolio for the performance of this contract; (iv) the relevant market and relevant market share; and v) the expiry date of the contract. Any changes to the contract as part of the duration of the contract, its suspension or expiry must be disclosed as essential information.


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