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It notes limitations because most respondents’ legislation does not specifically address market makers, reducing the ability to fully confirm or reject the discussion’s findings. The report explains how market makers generate two-way quotes, requirements for capital in emerging markets, and why exchange privileges can support liquidity and price discovery.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/the-influence-of-market-makers-in-the-creation-of-liquidity-report/301155/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/the-influence-of-market-makers-in-the-creation-of-liquidity-report/301155.png","ImageObject",300,407,{"name":92,"@type":93},"Asher","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-29","2026-09-19",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",15,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What role do market makers play in creating liquidity?","Question",{"text":113,"@type":114},"Market makers generate bids and offers by consistently quoting buy and sell prices, ensuring the existence of a two-way market. They help create liquid trading conditions in quote-driven environments.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"Why is the survey’s evidence limited?",{"text":118,"@type":114},"Most jurisdictions’ legislation does not specifically provide for market makers, so there was little systematic collection or collation of information on their incidence or impact. As a result, the discussion relies mainly on research from developed markets.",{"name":120,"@type":111,"acceptedAnswer":121},"What challenges do emerging market market makers face?",{"text":122,"@type":114},"Emerging market makers likely need more financial strength than those in developed markets to carry positions in less liquid markets. Asymmetry in market liquidity can become acute, making market making potentially unprofitable during bear runs.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},301155,1790313844,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":105,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},687197207639,"https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd","THE INFLUENCE OF MARKET MAKERS IN THE CREATION OF LIQUIDITY  \nReport by the Emerging Markets Committee  \nof the  \nInternational Organization of Securities Commissions  \nThis survey consisted of a questionnaire (Annexure 1) sent to all IOSCO EMC members. Replies were received from 18 jurisdictions, and have been analysed to determine the incidence and impact of market makers. Additional literary research was also conducted.  \nSurvey results  \nThe value of the survey results was diminished by the fact that the legislation in the jurisdiction of most respondents does not specifically provide for market makers. This has resulted in no real collection or collation of information regarding either their incidence or impact. This means we did not receive sufficient data to either support or refute the findings made in the discussion below. The discussion is therefor based mainly on the research of information, hard empirical data and findings in the developed markets.  \nThese findings will in all likelihood apply directly to emerging markets with one provision. The provision is that emerging market makers would need more financial muscle than their developed market counterparts to carry positions in less liquid markets. The discussion below illustrates the concepts and benefits of having market makers.  \nDiscussion of market makers  \nMarket makers are participants in quote-driven financial instrument trading environments, that fulfil the function of generating bids and offers. They create liquid markets by consistently quoting (buying and selling prices) -- thereby ensuring the existence of a two-way market.  \nMarket liquidity is likely to be asymmetrical in that it is high in a bull market, but maybe very thin in a bear market, or the majority of market participants may all favour buying or selling at the same time. Market makers need to have sufficiently large capital resources. This is particularly the case in developing markets, where the asymmetry is acute and potentially severe. They are therefore usually financial institutions or banks (particularly merchant and investment banks) . They often have to buy large quantities of securities during a bear market phase, which they can then only off-load at a later stage (implying a healthy financial carrying capacity) .  \nMarket making may consequently be unprofitable (or even costly) during a bear run. To counter the pit-falls, exchanges normally grant certain privileges to market makers. This would include the right to trade in a dual capacity (i.e. either in the capacity of principal or agent) or to execute large orders away from the market (socalled “block” trades) . These privileges are granted to attract market makers with sufficiently large capital resources in order to increase market liquidity. For these reasons, market makers are a desirable entity in emerging markets, and means should therefor be developed to encourage those with adequate finance to step forward and fulfil this role.  \nIn summary, market makers do two things:  \n􀀁 First, they are required to make a market in a stock by buying and selling from their own inventory, when public orders to buy or sell the stock are absent.  \n􀀁 Second, they may keep the market book of orders, consisting of limit orders to buy and sell, as well as stop orders placed by the general market participants.  \nIn developed and more liquid markets, the supply of suitable market makers is unlikely to be a problem. This means there are likely to be several market makers competing to create the market in a particular financial instrument, the market should be a more efficient one than a single specialist can provide.  \nConsequently, market makers are very likely to add to the liquidity and price discovery capabilities in a market. This translates to more market stability.  \nConclusion  \nThe market maker in general adds to the stability, liquidity and transparency (i.e. price discovery mechanism) of financial markets and is therefor a desirable","cbCailFrKBqn5yVX","https://ap.wps.com/l/cbCailFrKBqn5yVX","pdf",961769,"English","# Survey results\n## Limitations of the survey data\n## Applicability to emerging markets\n# Discussion of market makers\n## How market makers create liquidity\n## Capital requirements and market conditions\n## Exchange privileges for market makers\n## Market making functions and order books\n## Effects on liquidity and price discovery\n# Conclusion\n# Attachments\n## Annexure 1 - Survey questionnaire\n## Annexure 2 - Summary responses to survey\n## Annexure 3 - General literary research on market makers","[{\"question\":\"What role do market makers play in creating liquidity?\",\"answer\":\"Market makers generate bids and offers by consistently quoting buy and sell prices, ensuring the existence of a two-way market. They help create liquid trading conditions in quote-driven environments.\"},{\"question\":\"Why is the survey’s evidence limited?\",\"answer\":\"Most jurisdictions’ legislation does not specifically provide for market makers, so there was little systematic collection or collation of information on their incidence or impact. As a result, the discussion relies mainly on research from developed markets.\"},{\"question\":\"What challenges do emerging market market makers face?\",\"answer\":\"Emerging market makers likely need more financial strength than those in developed markets to carry positions in less liquid markets. Asymmetry in market liquidity can become acute, making market making potentially unprofitable during bear runs.\"}]","THE INFLUENCE OF MARKET MAKERS IN THE CREATION OF LIQUIDITY - Report | PDF",1789779556,38]