KSE: SECP approves regulations for market makers
Regulations expected to address reduced investor profits, volatility in share prices.
ISLAMABAD:
In line with international best practices and to promote liquidity in the capital market, the Securities and Exchange Commission of Pakistan (SECP) has approved regulations for market-makers for the Karachi Stock Exchange.
Market-makers play an important role in the capital market by promoting liquidity in relatively less liquid securities by buying and selling these securities in return for a bid-ask spread. The agreement is a key document agreed upon and signed by the market-maker and the corresponding exchange in which the market-maker undertakes the performing of market-making activities.
These regulations are expected to address reduced investor profits, volatility in the share prices and the presence of unofficial market-makers who may cause losses to investors. Initially, market-making has been allowed in all markets, except the ready market.
Published in The Express Tribune, December 15th, 2010.
In line with international best practices and to promote liquidity in the capital market, the Securities and Exchange Commission of Pakistan (SECP) has approved regulations for market-makers for the Karachi Stock Exchange.
Market-makers play an important role in the capital market by promoting liquidity in relatively less liquid securities by buying and selling these securities in return for a bid-ask spread. The agreement is a key document agreed upon and signed by the market-maker and the corresponding exchange in which the market-maker undertakes the performing of market-making activities.
These regulations are expected to address reduced investor profits, volatility in the share prices and the presence of unofficial market-makers who may cause losses to investors. Initially, market-making has been allowed in all markets, except the ready market.
Published in The Express Tribune, December 15th, 2010.