Under current U.S. Regulation NMS, an “OTC market maker” is a dealer that holds itself out as willing to buy from and sell to customers or others in the United States an NMS stock for its own account on a regular or continuous basis, otherwise than on a national securities exchange, in amounts less than block size. Keep the definition tied to the current § 242.600 elements; this page is not a general description of every dealer that trades securities over the counter.
ReviewedEvidence1 sourceSectionPhrases & Idioms
Quick answer
Under current U.S. Regulation NMS, an “OTC market maker” is a dealer that holds itself out as willing to buy from and sell to customers or others in the United States an NMS stock for its own account on a regular or continuous basis, otherwise than on a national securities exchange, in amounts less than block size.
Key details
Canonical FormOTC Market Maker
Core MeaningUnder current U.S. Regulation NMS, an “OTC market maker” is a dealer that holds itself out as willing to buy from and sell to customers or others in the United States an NMS stock for its own account on a regular or continuous basis, otherwise than on a national securities exchange, in amounts less than block size.
Further guidance
History Boundary
Keep the definition tied to the current § 242.600 elements; this page is not a general description of every dealer that trades securities over the counter.
Meaning
Under current U.S. Regulation NMS, an “OTC market maker” is a dealer that holds itself out as willing to buy from and sell to customers or others in the United States an NMS stock for its own account on a regular or continuous basis, otherwise than on a national securities exchange, in amounts less than block size.
Usage Boundary
Keep the definition tied to the current § 242.600 elements; this page is not a general description of every dealer that trades securities over the counter.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
Under current U.S. Regulation NMS, an “exchange market maker” is a member of a national securities exchange registered as a specialist or market maker under that exchange’s rules. Keep this definition tied to the Regulation NMS rule text; it does not define every market-making role outside that regulatory context.
A “bear market” is a period in which financial-market investments are generally falling in value. The dictionary definition does not require one universal percentage threshold, so do not make a fixed numeric cutoff part of the core meaning.
Consolidated Market Data is a current Regulation NMS defined term for enumerated data consolidated across national securities exchanges and associations.
Consolidated Market Data Product is a current Regulation NMS defined term. This guide preserves the specific U.S. securities-rule scope instead of substituting an ordinary-language meaning.
A crossed market occurs when the best bid to buy is higher than the best offer to sell. A crossed market is distinct from a locked market and can make an NBBO unreliable for some execution-quality calculations; do not use the terms interchangeably.
A national market system plan approved by the Securities and Exchange Commission, temporarily or permanently, pursuant to § 242.608. Keep the approval and § 242.608 scope in the definition; this is not a generic label for any market-system operating plan.
A locked market occurs when the best bid to buy equals the best offer to sell. A locked market is not the same as a crossed market: equality of the best bid and offer is locked, while a bid above the best offer is crossed. Regulatory treatment also depends on the specific rule and benchmark context.
