About Market Makers

The A B C's of Market Makers

1 Act as Market Maker
for the specified period
Once registered as a Market Maker, he has to act in that capacity for a period as mutually decided between the Merchant Banker and the Market Maker
2 Buy and Sell quotes
(Two way quotes ):
The Market Maker shall be required to provide a 2-way quote for 75% of the time in a day from the day of listing / the day when designated as the Market Maker for the respective scrip and shall be subject to the guidelines laid down for Market Making by the Exchange. Further, the Market Maker shall inform the Exchange in advance for each and every black out period when the quotes are not being offered by the Market Maker.
3 Competition The Market Makers will compete with other Market Makers for better price discovery
4 Deregistration The Market Maker shall be allowed to deregister by giving one month notice to the Exchange.
5 Execution of the order The Market Maker should execute the order at the quoted price and quantity must be guaranteed by the Market Maker, for the quotes given by him.
6 Fixed minimum depth The minimum depth of the quote shall be one lot . However, the investors with holding the share in one lot shall be allowed to offer their holding to the Market Maker in that scrip provided that he sells his entire holding in that scrip in one lot along with a declaration to the effect to the Selling Member.
7 General There would not be more than five Market Makers for a scrip. These would be selected on the basis of the criteria set by the Exchange which would include capital adequacy, networth, infrastructure, minimum volume of business etc.