Market maker means any specialist permitted to act as a dealer, any dealer acting in the position of a block positioner, any dealer who, with respect to security, holds himself out as being ready to buy and sell such securities for his own account on a regular and continuous basis. The market-making system may be “Quote Driven, Order Driven or Hybrid”.


A registered market maker shall perform the following functions:-

  1. Be a specialist in designated securities and shall hold itself out (by entering quotation in an inter-dealer communications system or otherwise) as being willing to buy and sell the designated securities for its own account on a regular or continuous basis;
  2. Promote continuous liquidity in the market at all times;
  3. Serve as a source of market information for the designated securities for which at all times, it stands ready;
  4. Facilitate a smooth trading atmosphere and engender market stability as well as promote price discovery.
  5. The market maker may in addition to sub rule (1) above, carry out other functions, such as underwriting; but it shall not combine market making functions with stockbroking.

Registration Requirements

Any entity desirous of being registered as a market maker must comply with Rule 79 of the SEC rules and regulations, 2013 which is;

(1) Be registered as a member of a self- regulatory organization (SRO) as required by the provision of rule 25 [(1), (2), and(3)] of the rules and regulations.

(2) Must comply with the code of conduct of capital market operators as provided under rule 28(1) and (2) of the rules and regulations. 58 SEC Rules; June 2013

(3) Maintain a fidelity bond in line with the provisions of rule 27.


The Market Maker Shall:-

  1. Be a company duly registered with the Corporate Affairs Commission.
  2. Be an entity desirous of performing the function of a market maker in the capital market and shall be licensed as a broker–dealer by a self- regulatory organization (SRO).
  3. Have a minimum paid up capital as specified by the supervisory self-regulatory organization (SRO) with the approval of SEC. The market maker shall at all times maintain sufficient liquid assets to cover its current indebtedness.
  4. Clearly state in its Memorandum and Articles of Association that it can deal in securities in the capital market.
  5. Convey any change in information, which affects the status of the company to the Commission as required by rule 37 of SEC rules and regulations.


It is the law that a Market Maker must operate within the established transaction spread to be specified by the supervising self-regulatory organization (SRO) with the approval of the Commission.