Payments for Market Making

Overview

A broker-dealer may not accept a payment from an issuer, or from any person affiliated with the issuer, for making a market in, or posting a quote as to, the securities of the issuer. See also search on Payments to Publish. On the one hand, the purposes of this rule are fairly straightforward: a firm that's posting quotes on the best of an issuer could be seen as manipulating the price of the issuer's securities or conducting an improper distribution of the issuer's securities that is not registered under the Securities Act. (That said, as small issuers have trouble finding market makers that are willing to provide liquidity in their securities or provide research as to their securities, query as to whether there should be some mechanism by which it is possible for an issuer to recognize the value of a market maker being willing to market make in, or provide research as to, the issuer's securities.)

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