Passive Market Making

What this video covers

• How passive market-making relief applies only to covered securities that are Nasdaq securities, and why an unauthorized or suspended Nasdaq security fails before any condition is tested
• Why a stabilizing bid subject to the stabilization rule, an at-the-market offering, or a best efforts offering makes the relief unavailable
• How the 30% ADTV limitation is calculated from the firm's own reference-period volume, not the security's total market volume, and how net purchases are measured
• Why transactions must be effected in the capacity of a registered market maker on Nasdaq and cannot exceed the highest independent bid at the time of the transaction
• How the daily purchase limitation uses the greater of the 30% ADTV limitation or 200 shares, including the single-order proviso
• What happens after net purchases equal or exceed the purchase limitation: prompt quote withdrawal, no reopening after later sales, and the remainder-of-day restriction
• When the duty to lower the bid applies, how displayed size is limited, and how passive-bid designation, Financial Industry Regulatory Authority (FINRA) notification, Securities and Exchange Commission (SEC) disclosures, reporting, and the knows-or-has-reason-to-know anti-manipulation standard work