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PMMs are market makers with significant
responsibilities, including overseeing the opening, providing continuous quotations
in all of their assigned options classes, and handling customer orders when the
ISE BBO is not at the best available price. A PMM must purchase or lease a PMM
membership entitling the member to act as PMM in one group (or "bin") of option
classes. One PMM is assigned to each of the ten groups of options traded on the
Exchange.
An important advantage of having a PMM assigned to each option is that members
have a point of contact, who is responsible for maintaining orderly markets and
is available to answer market questions.
CMMs are market makers that add depth and liquidity to the market. CMMs in the first market are required to provide continuous quotations in at least 60% of the options classes in their assigned group. Each CMM quotes independently. CMMs in the Second Market do not have a minimum quoting requirement. A CMM must purchase or lease a CMM membership to enter quotations in the first market, and each membership entitles the member to enter quotations in one group of options in the first market.
Up to 16 CMMs are appointed to each of the 16 bins of options traded on the Exchange.
FXPMMs are market makers that have very similar responsibilities to PMMs for equity and index options. The most significant difference between the two types is that the responsibilities of a FXPMM are limited only to ISE�s FX Options. A FXPMM must purchase a Trading License directly from the Exchange via an auction for each currency pair. The auction process promotes competition because it requires prospective FXPMMs to provide market quality commitments as part of its bid. One FXPMM is assigned to each currency pair traded on the Exchange. A FXPMM Trading License does not confer the right to trade equity and index options. Similarly, a PMM in the equity and index options markets must purchase a Trading License in order to make markets in FX Options.
FXCMMs are market makers that have very similar responsibilities to CMMs for equity and index options. FX CMMs are only permitted to make markets in FX Options. A FXCMM must purchase a Trading License directly from the Exchange via a �Dutch� auction process. A Trading License entitles the member to make markets in one currency pair. Up to 10 FXCMMs are appointed to each currency pair traded on the Exchange.
EAMs are broker/dealers that represent agency and proprietary orders on the Exchange.
An EAM does not purchase a membership. Rather, once approved as an ISE member,
an EAM pays an access fee that permits the firm to place orders in all of the
options traded on the Exchange. EAMs cannot enter quotations or otherwise engage
in market making activities on the Exchange. |
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