Series 55

Market Maker Responsibilities - Withdrawing Quotes

There are two ways that a market maker may withdraw their quotes for a security. A market maker may withdraw their quotes either on a voluntary basis or on an excused basis. If a market maker withdraws their quotes on a voluntary basis they simply remove or “pull” their quote. A market maker who voluntarily withdraws their quote may not re- register as a market maker in that security for 20 business days. If a market maker removes their quote for any of the following reasons it would be considered a voluntary withdraw:

  • A sudden influx of orders
  • Trading losses
  • Lack of interest
A market maker may also withdraw their quotes on an excused basis by applying to the NASDAQ for permission to withdraw their quotes. A market maker may request an excused withdrawal under the following circumstances:

  • The firm has 3 or fewer NASDAQ level III workstations and key personnel are going on vacation. The application must be made 1 business day prior to removing the quotes.
  • A firm may be granted an excused withdrawal for up to 5 business days for circumstances beyond the market maker’s control such as illness or acts of God.
  • The market maker is participating in a distribution or is acting as a passive market maker.
  • The firm may be granted an excused withdrawal for up to 60 days for legal or regulatory reasons, i.e., the firm has inside information regarding the issuer of the security as a result of an investment banking relationship.
  • The firm involuntarily fails to maintain a clearing relationship.
  • An excused withdrawal may be granted for religious holidays provided that the application to NASDAQ is made 1 business day prior to the withdrawal.
Accidental Withdrawal of Quotes

If a market maker is attempting to withdraw its quote for a given security and inadvertently types in the wrong symbol, resulting in the market maker’s quote being withdrawn from the wrong security; the market maker may immediately have its quote reinstated by NASDAQ. NASDAQ will reinstate the market maker’s quote so long as the market maker contacts NASDAQ within one hour and it is apparent that the removal of the quote was accidental in nature. Additionally NASDAQ will look at the market maker’s accidental withdrawals over the course of the year. NASDAQ considers 2-6 accidental withdrawals acceptable depending on the number of securities the firm makes markets in.





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