London Stock Exchange Market Makers
London Stock Exchange market makers are effectively traders who wish to make a two-way market (buy and sell) in certain specified shares. These shares must be nominated in advance to the London Stock Exchange.
Generally, the more liquid a company is and the larger it's value, the more market makers will be willing to trade it. Quotes must be maintained for all shares in which they make a market between 8am and 4.30pm Monday to Friday.
When using the SEAQ system, here is what will happen ... You decide to buy or sell shares and so call your broker on the phone. Your broker will have on his desk a quotation system. He or she will input the details of the trade you wish to carry out into his system and be left with two options.
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The broker will either be able to trade online for you through a market maker, or will need to call a market maker to execute the trade. Either way, it should take just a few seconds to complete.
It is this two step approach that forces your stock broker to inform you about 'indicative prices' as he checks your willingness to proceed before contacting a London Stock Exchange market maker.
Historically, a stockbroker would deal with clients (marketing, customer service and the management of funds) but would be located around the country, near to clients, usually in large cities. This meant that they were not actually present on the trading floor of the stock market themselves. The market maker would be present at the London Stock Exchange and so would fulfill trades.
Needless to say, in a modern information society which is interconnected as never before, the role of a market maker has changed and been reduced.
There are also 16 companies that approved by the Financial Services Authority to be gilt-edged market makers (GEMMs). This status allows them to offer a market in gilts (government bonds).
To read more about the workings of the LSE and FTSE, please visit:
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London Stock Exchange Stockbrokers
London Stock Exchange Stockbroker Charges
London Stock Exchange Nominee Accounts
London Stock Exchange FTSE Index
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London Stock Exchange SEAQ
London Stock Exchange SETS
London Stock Exchange Liquidity
London Stock Exchange Listing Rules
London Stock Exchange Listing Requirements
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