DEFINITION of 'Supplemental Liquidity Provider - SLP'

One of three key market participants on the New York Stock Exchange (NYSE). Supplemental Liquidity Providers (SLPs) are market participants that use sophisticated high-speed computers and algorithms to create high volume on exchanges in order to add liquidity to the markets. As an incentive for providing liquidity, the exchange pays the SLP a rebate or fee, which was 0.15 cents as of 2009.

BREAKING DOWN 'Supplemental Liquidity Provider - SLP'

The Supplemental Liquidity Provider (SLP) program was introduced shortly after the collapse of Lehman Brothers. The collapse of Lehman Brothers in 2008 caused major concerns about liquidity in markets, which led to the introduction of the SLP to attempt to alleviate the crisis. The other two key market participants are Designated Market Makers (DMMs) and Trading Floor Brokers.

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