The Maker-Taker Pricing Model and Its Impact on the Securities Market Structure: A Can of Worms for Securities Fraud?
42 Pages Posted: 24 Feb 2014 Last revised: 8 Sep 2014
Date Written: 2014
This Article examines the maker-taker pricing model, one of the key financial innovations, and its significance for the securities market structure in the context of securities fraud. While addressing the origins, nature, and evolution of the maker-taker pricing model, the Article focuses on the implications of this financial innovation for fraudulent practices and the applicable regulatory framework from the angles of the duty of best execution, the boundaries of market manipulation, the order type controversy, trading obligations and privileges of market makers, and various reform proposals.
Keywords: securities fraud, pricing models, best execution, market manipulation, order types, market makers
JEL Classification: G18, K22
Suggested Citation: Suggested Citation