• Eligibility

    • MAE-4.6.1

      A licensed exchange or licensed market operator must ensure that a licensee meets the following requirements prior to being registered as a market maker:

      (a) The licensee is incorporated in the Kingdom of Bahrain;
      (b) The licensee must be licensed by the CBB as a Bank or as an Investment Firm(Category 1 or Category 2) or as a Broker-Dealer under CBB Rulebook Volume 6; and
      (c) The licensee is a member of the licensed exchange or licensed market operator.
      Added: January 2019

    • MAE-4.6.2

      A licensed exchange or licensed market operator must formulate its own objective eligibility criteria for registration of market maker. The criteria, at the minimum, must include;

      (a) Capital requirement;
      (b) Infrastructure requirements;
      (c) Trading and market making experience;
      (d) Business continuity arrangements;
      (e) Risk management policy including settlement guarantee mechanism;
      (f) Rights and obligations of the market 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 2019

    • MAE-4.6.3

      A licensed exchange or licensed 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 practice market making;
      (b) Separation between market making and any other activities that the member is licensed to practice in terms of organisational, technical, financial and administrative arrangements. Evidence thereof may be submitted by the member through the following;
      (i) The adopted mechanism to separate the market making from other licensed activities;
      (ii) The staff assigned to perform market making activities;
      (iii) Experience and qualification of technical and administrative staff assigned to perform market making activities;
      (c) Details of risk management systems and internal control procedures.
      Added: January 2019

    • MAE-4.6.4

      A licensee, as specified in Paragraph MAE-4.6.1, desirous of undertaking market making activity must apply to the licensed exchange or licensed market operator for registration as a market maker.

      Added: January 2019

    • MAE-4.6.5

      A licensee must demonstrate to the satisfaction of the licensed exchange or licensed market operator that it is suitably qualified to undertake market making activity.

      Added: January 2019

    • MAE-4.6.6

      A licensed exchange or licensed market operator may, prior to issuing its consent for registration of a member as a market maker, may conduct on-site inspection of the member to ensure the availability of requisite systems, processes and infrastructure for undertaking market making activity.

      Added: January 2019

    • MAE-4.6.7

      If the licensed exchange or licensed market operator is satisfied that the member is eligible to carryout market making activities, the licensed exchange or licensed market operator may appoint the member as a market maker and enter into a market maker agreement with the member specifying the date of commencement of its term as market maker.

      Added: January 2019

    • MAE-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 the market maker;
      (b) Duration of the market maker agreement;
      (c) Conditions under which market maker agreement may be terminated;
      (d) Time window during trading hours that the market maker should be obliged to ensure presence on the order book;
      (e) The maximum spread between the bid and offer price that market maker should maintain; and
      (f) Minimum, maximum and normal order size with agreed specifications.
      Added: January 2019