Market Maker System Research

Securities market trading system, auction system and the market maker system is a two core trading system of the international securities markets. Auction system, also known as commission-driven trading system, centralized auction system, and specifically refers to the opening price of the call auction form, then both parties will be entrusted to the respective agents brokers, investors trading orders continue to pass through the trading system, by pricewith the principle of time priority sorting, buy and sell orders matching auction trading system transactions. Maker system, also known as the quote-driven trading system, the securities have a certain strength and credibility of the legal person as authorized dealer of a certain securities to investors for two-way prices, buyers and sellers delegate does notdirect matching of the transaction, but from the hands of market maker on the market to buy or sell securities, cease trading, or market makers must continue to provide a quotation and trading of securities services. When the market price fluctuations, market makers tend to assume greater risk. Market makers to provide services and risk can be seen as operating costs, which mainly rely on market makers to sell offer and the purchase of the bid-ask spread between the offer to receive compensation, the balance part of the market maker profits.The most basic functions of the market maker system to solve the problem of insufficient liquidity of the stock market is due to the uncertainty of trading instruction stream, both the supply and demand of securities in time and the number is difficult to achieve consistent, so that the market can not at the same timesegment on the settlement of the sale and purchase transactions Directive, which will require that market makers can provide immediate and convenient transaction services. In China, the auction system from China’s securities market was established up to now has been used. Although the auction system in the development of China’s securities market matures, but the ensuing auction system defects are becoming increasingly prominent. The introduction of China’s securities market maker system to supplement the auction system, and improve the trading system of China’s securities market, so as to further promote the development of China’s securities market.The paper is divided into four chapters.The first chapter summarizes the legal basis of introducing a market-maker system, defined through the application of the analysis of the market maker system, and discusses different from the contact with the auction system, explained the necessity of introducing a market-maker system from all anglesand reasonable.The second chapter by selected U.S. Nasdaq market, the Taiwan Emerging Stock Market, China’s interbank bond market and interbank foreign exchange market as the inspection object by different countries and regions, different areas, different levels of development market maker systemanalysis of the characteristics and development experience, China’s securities market maker system constructed the basic theoretical research.The third chapter is about the difficulty of introducing a market-maker system, the barriers introduced by the existing laws of the market maker system, as well as market maker risk of regulatory issues and then by the academic controversy.The fourth combination of the above problems in order to determine the mode selection of introducing a market maker system, a reasonable construction of the idea of China’s market-maker system.