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  • Market Making Scheme

    • MAE-4.6.9

      A licensed exchange or licensed market operator must ensure that:

      (a) The market making scheme is objective, transparent, non-discretionary and non-discriminatory and must not give rise to disorderly market conditions or market abuse;
      (b) The transactions carried out under the market making scheme are solely for the purpose of enhancing liquidity and regularity of trading in illiquid securities;
      (c) The scheme does not compromise on market integrity and risk management;
      (d) All necessary systems and processes are in place to monitor market abuse and manipulation including collusion between members indulging in trades with an objective to enhance liquidity artificially;
      (e) The activities of a market maker is continuously monitored for effective compliance with applicable law, rules and regulations;
      (f) Orderly trading conditions are maintained and the minimum set of requirements to be met by the market maker in terms of presence, size and spread under normal trading conditions are adhered to;
      (g) The number of market makers in a market making scheme is not restricted; and
      (h) The CBB is informed of any violations of the provisions of applicable law, rules and regulations.
      Added: January 2019

    • MAE-4.6.10

      A licensed exchange or licensed market operator must put in place the internal procedures and controls to regulate the activity of market making. Such procedures and controls, at the minimum, must include:

      (a) The technical requirements;
      (b) The trading and settlement mechanism relating to the orders of a market maker;
      (c) The type and amount of settlement guarantees required for practising the activity of market making;
      (d) The obligations of a market maker in connection with providing liquidity;
      (e) Determine the list of securities eligible for market making;
      (f) Mechanism to identify the market maker's orders/trades in order to ensure separation between brokerage and market making activities performed by the member;
      (g) Reporting requirements by market makers and issuers; and
      (h) Disclosure requirements by market makers and issuers.
      Added: January 2019

    • MAE-4.6.11

      A licensed exchange or licensed market operator must review and approve the market making agreement entered between an issuer of listed security and a market maker. While assessing the market making agreement, the licensed exchange or licensed market operator must take into account the requirements contained in Section MIR-4.19.

      Added: January 2019

    • MAE-4.6.12

      A licensed exchange or licensed market operator must at all times ensure that a market maker maintains a level of financial resources, risk management, compliance and internal control requirements that are commensurate with the scale and complexity of their business activities.

      Added: January 2019

    • MAE-4.6.13

      A licensed exchange or licensed market operator may lay down additional criteria for market makers as risk containment measure.

      Added: January 2019