Remote market maker

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Remote Market Makers (RMM) are securities and options exchange individual market makers and member organizations allowed to engage in market making from any location, thereby adding additional liquidity and depth to markets. Prior to several exchanges making this means of market making available, market makers on a physical exchange had to be present at that venue. Electronic exchanges, obviously without a physical trading floor, did not have to be concerned with locality of market makers, which was an advantage. This led physical exchanges to enact new rules which would change how market makers could participate.

Remote market makers, who choose to operate solely from off the trading floor, can stream quotes into classes electronically (as in CBOE's Hybrid) in their market maker appointments, but they will not participate in open outcry trades. RMMs have quoting obligations, as well as other market maker obligations.[1][2][3]


References

  1. "SECURITIES AND EXCHANGE COMMISSION (Release No. 34-51366; File No. SR-CBOE-2004-75) March 14, 2005”. www.sec.org.
  2. "RMMs/e-DPM. www.cboe.org.
  3. "Information Circular 03-135 (10/29/03)”. www.cboe.org.