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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

Stanislav Dolgopolov

Decimus Capital Markets, LLC

Date Written: 2014

Abstract

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

Dolgopolov, Stanislav, The Maker-Taker Pricing Model and Its Impact on the Securities Market Structure: A Can of Worms for Securities Fraud? (2014). Virginia Law & Business Review, Vol. 8, No. 2, pp. 231-272, 2014. Available at SSRN: https://ssrn.com/abstract=2399821 or http://dx.doi.org/10.2139/ssrn.2399821

Stanislav Dolgopolov (Contact Author)

Decimus Capital Markets, LLC ( email )

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