A market maker is classified as any Dealing Member (a member company who has been granted license by The Exchange as a dealer in securities), who has an undertaking and has been appointed by The Nigerian Stock Exchange, to enhance the market liquidity of a particular security in accordance with the Rules.
Types of market makers include:
· Primary Market Maker: Is any market maker who has been appointed by the Nigerian Stock Exchange as the foremost liquidity provider of a particular security and has undertaken to assume the role.
· Supplemental Market Makers: Is any market maker who is appointed to act as a supplementary liquidity provider.
The primary responsibilities of a Market Maker, is to maintain a fair and orderly market, in their individual securities of responsibility and generally, to make a positive contribution to the operation of the market. Each Market Maker must ensure that, trading for the Market Maker's own account is:
- Practical under the circumstances
- Consistent with just and equitable principles of trading
- Not damaging to the integrity of the Exchange or the market.
Market making involves the act of entering bid and offer prices in the ATS, for a Specified Security (a security specified by The Exchange as available for market making), based on the requirements stipulated by the Exchange.