New regulation of market making: Bank of Russia requirements
The Bank of Russia has updated its requirements to traders that, under an agreement with the exchange, support parameters of trading with financial instruments, currency or products, in other words, act as market makers. Such activities are important to ensure the liquidity of the financial market.
The new regulation specifies, in particular, that market making obligations be carried out only through passive quotes (which do not lead to the conclusion of transactions at the time of issuing). At the same time, their volume during one trading session cannot be less than 75% of the total volume of a market maker’s quotes. The possibility of maintaining trading parameters at the expense of individuals — unqualified investors — is excluded in order to reduce the risks of market manipulation. The exchanges, in turn, will confirm the compliance of quotes with the established requirements and inform traders about the identified inconsistencies.
The new rules as a whole will come into force in April 2022 with the norm on the threshold of the daily passive quotes to be effective in October 2022.