Linking the Securities Market Structure and Capital Formation: Incentives for Market Makers?

Abstract

This Article analyzes various incentives for market makers as a potential regulatory tool to address the interrelated crises in capital formation and market making in smaller-cap stocks. While considering the nature and development of the market making crisis and its impact on capital formation, such approaches as incentives for market makers conferring advantages in the trading process itself and issuer-to-market maker compensation arrangements are evaluated. The Article also addresses the significance of the integrated model of market making.

A Regulatory Framework for Cryptocurrency

“…150 The business model of exchanges consists in the maker-taker fee model which encourages market liquidity by rewarding the makers, whose orders exist on the order book prior to the trade, with a fee discount. 151 By contrast, the takers, whose orders match the makers' ones, pay a higher fee for removing the liquidity created by makers. 152 Regulatory concerns, as well as the closing of technological and financial channels by private institutions, 153 are commonly presented as causes of the cryptocurrency downturn.…”