Eligibility
MAE-4.6.1
A
licensed exchange orlicensed market operator must ensure that alicensee meets the following requirements prior to being registered as amarket maker :(a) Thelicensee is incorporated in the Kingdom of Bahrain;(b) Thelicensee must be licensed by the CBB as a Bank or as an Investment Firm(Category 1 or Category 2) or as aBroker-Dealer under CBB Rulebook Volume 6; and(c) Thelicensee is a member of thelicensed exchange orlicensed market operator .Added: January 2019MAE-4.6.2
A
licensed exchange orlicensed market operator must formulate its own objective eligibility criteria for registration ofmarket maker . The criteria, at the minimum, must include;(a) Capital requirement;(b) Infrastructure requirements;(c) Trading andmarket making experience;(d) Business continuity arrangements;(e) Risk management policy including settlement guarantee mechanism;(f) Rights and obligations of themarket maker including quoting obligations, inventory size, order type and minimum order size; and(g) Terms and conditions under which market making may be terminated;Added: January 2019MAE-4.6.3
A
licensed exchange orlicensed market operator may have regard to the following matters in determining whether an applicant has satisfied the eligibility criteria:(a) Adequate financial capital and qualified technical and administrative staff to practicemarket making ;(b) Separation betweenmarket making and any other activities that themember is licensed to practice in terms of organisational, technical, financial and administrative arrangements. Evidence thereof may be submitted by themember through the following;(i) The adopted mechanism to separate themarket making from other licensed activities;(ii) The staff assigned to performmarket making activities;(iii) Experience and qualification of technical and administrative staff assigned to performmarket making activities;(c) Details of risk management systems and internal control procedures.Added: January 2019MAE-4.6.4
A
licensee , as specified in Paragraph MAE-4.6.1, desirous of undertakingmarket making activity must apply to thelicensed exchange orlicensed market operator for registration as amarket maker .Added: January 2019MAE-4.6.5
A
licensee must demonstrate to the satisfaction of thelicensed exchange orlicensed market operator that it is suitably qualified to undertakemarket making activity.Added: January 2019MAE-4.6.6
A
licensed exchange orlicensed market operator may, prior to issuing its consent for registration of amember as amarket maker , may conduct on-site inspection of themember to ensure the availability of requisite systems, processes and infrastructure for undertakingmarket making activity.Added: January 2019MAE-4.6.7
If the
licensed exchange orlicensed market operator is satisfied that themember is eligible to carryoutmarket making activities, thelicensed exchange orlicensed market operator may appoint themember as amarket maker and enter into amarket maker agreement with themember specifying the date of commencement of its term asmarket maker .Added: January 2019MAE-4.6.8
The
market maker agreement referred to in Paragraph MAE-4.6.7 may at the minimum, include the following terms and conditions:(a) Rights and obligations of themarket maker ;(b) Duration of themarket maker agreement ;(c) Conditions under whichmarket maker agreement may be terminated;(d) Time window during trading hours that themarket maker should be obliged to ensure presence on the order book;(e) The maximum spread between the bid and offer price thatmarket maker should maintain; and(f) Minimum, maximum and normal order size with agreed specifications.Added: January 2019