Is participation during at least 80% of continuous trading hours a requirement for regulated market makers?

The requirement regarding participation during trading hours for regulated market makers is established to ensure a balance between availability and operational flexibility. In this context, the correct response indicates that participation in at least 80% of continuous trading hours is not a strict requirement for regulated market makers.

The market maker’s role is generally to provide liquidity and facilitate trading, but it is not mandated that they participate constantly within defined trading hours. This allows market makers to manage their activities based on market conditions, their own strategies, and risk management practices without being constrained to maintain a specific threshold of trading hours.

This flexibility can be vital in ensuring that market makers can react appropriately during periods of volatility or low trading interest, where maintaining a constant presence may not be economically viable or strategically beneficial.

Understanding the operational framework of market makers helps clarify why continuous participation is not an obligatory requirement and supports the adaptability of participants in a regulated market environment.