Market makers are important players in the marketplace, as they support the liquidity of securities by providing continuous bid and ask quotations. Holders of securities that have appointed market makers can be confident that they can sell their holdings at any time. Through enhancing the liquidity of securities, market makers contribute to the maintenance of an efficient and orderly market.
The market maker concept was introduced on the Armenian Stock Exchange in December 2006. Market making status can be obtained by any exchange member who complies with the provisions of Armenia Securities Exchange Market Maker Rules. Market makers on Armenia Securities Exchange are required to:
-
provide continuous two-sided quotations for their appointed issue(s) from starting within 10 minutes after the opening of the trading session up until the close of trading;
-
within three minutes after the matching of buy and/or sell order, place new two sided quotations;
-
ensure the minimum quotation volume defined for their appointed securities, with partial execution stated as a condition (minimum quotation value is defined according to the procedure outlined in Market Maker Rules, depending on the market capitalization of the issuer);
-
provide two-sided quotations within the spread limits envisaged by Armenia Securities Exchange rules;
-
conclude at least one transaction per every three changes in two-sided quotations for each class of their appointed issues occurred during the same trading session.