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Fresh Amendments to Market Making Instructions

Recent market dynamism, major changes in market structure and expansion of market making activities led to approval if new market making instructions by the SEO.

 

Recent market dynamism, major changes in market structure and expansion of market making activities led to approval if new market making instructions by the SEO. This new instruction has been created with the cooperation of the SEO, Tehran Stock Exchange (TSE), Iran Fara Bourse (IFB) and other financial institutions active in the field of market making.

The main amendments to the new instruction are as follows:

-         Granting a market making operation license for each listed security to both the TSE and IFB, in order to expedite the market making operations. The market making operation license issued by the TSE or IFB is limited to the securities in the license, and trading in any other ticker symbol requires the renewal of the licensing process from the relevant company.

 

-         Market Maker ranking. The performance of the market maker is continuously evaluated by the TSE and IFB. Under the new instructions, the commission fee mentioned in the contract market will be based on the ranking of the market makers.

 

-         To improve the quality of market makers’ performance, it was decided that the TSE and IFB to announce any breach in the provisions of this instruction on a daily and weekly basis. 

 

-         “Adjusting market makers’ obligations to the minimum daily transactions”. Based on this, the TSE and IFB will be required to adjust the parameter of minimum daily transactions in proportion to the capital increase. Also to notify the market maker and publish it in their information database.

 

-         Determining the classes of liquidity. According to the liquidity criteria set by the TSE and IFB, the securities will be placed in the liquidity classes and based on the conditions of each liquidity class; the market making parameters will be announced to the public.