The Bucharest Stock Exchange plans to become a market maker on the spot and derivatives marketPublish date: 23-11-2007
The Bucharest Stock Exchange said it plans to roll into the spot and derivatives market as a market maker and introduce nominee accounts and Exchange Traded Funds, according to the exchange's general manager Stere Farmache.
A market maker is a firm willing both to buy and sell certain shares regularly and continuously at the price of the exchange market.
A market maker is needed to ensure the market's stability, Finans Securities general manager, Adrian Simionescu said, adding such a firm intervenes when events that can affect shares occur. Then the market maker takes over the price risks and ensures a normal evolution of the exchange, avoiding steep price changes, he noted.
The nominee accounts are accounts in which execution-only brokers act as nominees for their clients. The spot market or cash market is a commodities or securities market in which goods are sold for cash and delivered immediately.
Exchange Traded Funds, open-end investment companies that can be traded anytime during the day, are becoming increasingly popular due to their hedging properties, tax advantages, and cost savings when compared to other fund investments
The Bucharest Stock Exchange will release foreign currency derivatives (euro and U.S. dollar) and derivatives on the investment funds known as SIFs, lender Banca Transilvania, oil company Petrom and electricity transporter Transelectrica.
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