Series 79: NASDAQ Passive Market Making (Rule 103)

NASDAQ Passive Market Making (Rule 103)

Regulation M, Rule 103 permits registered NASDAQ market makers that are also securities distribution participants to effect “passive” market-making transactions in those securities during the restricted period. The rule is subject to several requirements and limitations.

• • Price limitation. A passive market maker’s bids and purchases for the security may not exceed the highest independent bid—meaning a bid from someone not participating in the distribution—at the time of the transaction. If all independent bids for the security fall to a price below the pass