On the New York Stock Exchange, a rule requiring designated market makers to trade on their own accounts to help ensure a fair and orderly market. The rule also outlines other rights and responsibilities for designated market makers; for example, they must help the NYSE remain sufficiently liquid to provide for fair quotes. Previously, Rule 104 mandated that designated market makers (then known as specialists) not trade on their own accounts, but this was amended in 2008 as part of a wider streamlining of NYSE rules.
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A New York Stock Exchange rule that prohibits specialists from trading for their own accounts except when such trades are necessary to maintain a fair and orderly market.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.