Roles and Responsibilities of Market Makers
The following are the roles, obligations and responsibilities that are required to be carried out by the Market Maker.
- The Market Maker shall be required to provide a 2-way quote for 75% of the time in a day.
- The minimum depth of the quote shall be Rs.1,00,000/-. However, the investors with holdings of value less than Rs 1,00,000 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 broker.
- Execution of the order at the quoted price and quantity must be guaranteed by the Market Maker, for the quotes given by him.
- There would not be more than five Market Makers per scrip.
- The Market Maker may compete with other Market Makers for better quotes to the investors.
- The Market Maker has to start providing quotes from the day of the listing / the day for the respective scrip and shall be subject to the guidelines laid down for market making by the exchange.
- The Market Maker has to act in that capacity for a period of three years.