Linking the Securities Market Structure and Capital Formation: Incentives for Market Makers?
University of Pennsylvania Journal of Business Law, Vol. 16, No. 1, pp. 1-55, 2013
55 Pages Posted: 3 Nov 2012 Last revised: 11 Mar 2014
Date Written: February 20, 2014
This Article analyzes various incentives for market makers as a potential regulatory tool to address the interrelated crises in capital formation and market making in smaller-cap stocks. While considering the nature and development of the market making crisis and its impact on capital formation, such approaches as incentives for market makers conferring advantages in the trading process itself and issuer-to-market maker compensation arrangements are evaluated. The Article also addresses the significance of the integrated model of market making.
Keywords: market makers, capital formation, incentives, compensation arrangements
JEL Classification: D62, G18, G24, K22
Suggested Citation: Suggested Citation