Market Maker FAQ v1.0

1.    What are Market Makers? a.        What are Market Makers?                                                                i.      Market Makers are companies who have agreed with their clients and who have been approved by regulators to “Make a market” in the shares of the client. b.        Who are the Market Makers?                                                                i.      They are usually large international banking organisations, usually with thousands if not tens of thousands of employees’ worldwide. c.        What is the job of a Market Maker?                                                                i.      Simply it is to make a market, i.e. to ensure that there is always a market in which investors can buy and sell shares of the clients they are Market Makers for. d.        Who is a Market Maker responsible to?                                                                i.      Their shareholders.                                                               ii.      Their clients.                                                             iii.      The broker with whom they are entering into a contract with.                                                             iv.      Whilst not strictly “responsible to” the regulator the Market Maker has to be able to demonstrate that the obvious conflict of interests arising from this list are dealt with in an appropriate manner, and that no one is especially advantaged or disadvantaged. e.        What is a client in the Market Maker context?                                                                i.      The client is the quoted company.  Quoted companies have contracts with the Market Makers in their stock. <<Previous Home Next>> The latest version of this FAQ can be found at http://www.financiallinks.co.uk/Insider/InsiderIndex.htm. © Copyright Niro Computers Ltd 1999.  This FAQ is maintained by Jason Ward. This FAQ can be freely distributed, so long as the URL to the original and copyright message remain intact.

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