The activities of a market maker are regulated by the Belgrade Stock Exchange rules.
A MARKET MAKER may be any member of the Belgrade Stock Exchange who fullfilled the legally prescribed requirements and who concluded a contract on market making with the Exchange obliging him to continuously and for his own account place buy and sell orders for particular securities, under the contract terms and in compliance with the Exchange Rules of Business Operation.
One security may simultaneously have several market makers.
A market maker on financial markets is commonly called a specialist or a liquidity provider.
By simultanous and continuous placement of buy and sell orders, and in line with the liquidity level of the given security, market makers increase the turnover, liquidity of the security and market depth and reduce the price range for particular securities.
A market maker makes profit through the difference between buy and sell price, i.e. spread. The members of the Belgrade Stock Exchange who choose to perform market making operations pay a discounted fee to the Exchange for transactions carried out in the capacity of a market maker, and there are also some forms of market maker protection aimed at preventing too many trade executions (20% of average daily turnover in previous six months). In such situations, a market maker may withdraw from the market without fulfilling the required time period within one trading session.
The criteria which a security must fulfill to be traded by a market maker, as well as the conditions for performing market making operations for a particular security, are defined by the Decision on establishing conditions for performing the activities of a market maker (valid from December 30th, 2009).