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BSE enhances incentives to market makers

Our Bureau

MUMBAI, May 14

THE Bombay Stock Exchange has further enhanced its scheme of market making for stock futures and Sensex futures by increasing the monetary incentives. The enhanced scheme will be effective from May 14.

The market maker of a particular stock/index future will now get a minimum of Rs 25,000 per month for the next three months (compared to Rs 10,000 per month).

In a statement BSE said that the obligations had also been relaxed for market makers. The market maker has to provide three quotes in the near month. The difference between the second bid and the third bid in the near month is now higher than what was specified earlier.

Besides, the bid-ask quotes in the middle month is now required only during the week in which the near month contract expires.

"The BSE has received good initial response to its market making scheme and with the enhanced incentives, we believe that there will be a sustainable growth in volumes," said Mr Sanjiv Mehta, CEO (derivatives segment), of the BSE.

The exchange currently offers the entire range of derivative products.

The BSE has appointed 21 market makers in 20 futures (stock and Sensex) products. The market-making scheme for BSE's derivative segment became operational on May 6 for a period of two years.

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