All market makers are automatically checked to evaluate whether they fulfill Market Maker obligations and are able to take part in the Market-Making programs. Only quotes and mass quotes traded via the market maker-account are taken into consideration.
Market makers are basically introduced in exchange trading to ensure liquidity so that buyer/seller should not feel dull market. To make market condition live and with possibilities market makers are becoming parts of the exchange trading across the world. Market maker need to act as buyer to seller and vice versa. In this course exchange ensures that wash trading and front running should not occur and fair market practice shall be on place.
Normally market maker needs to ensure that 90% of quotes should be filled on given contracts. Based on market conditions it may vary but bench mark shall not be less than 90%. Spread and tick movement also in line of defined by exchange.
Quotes are double-sided and must have a bid/ask spread equal to or narrower than the maximum quote spread. Quotes entered by Market Makers are binding, and orders can be matched at these prices. All quotes that fulfill the Market-Making obligations have to be entered on the Market-Making accounts. Only trades posted to the MM-accounts are eligible for refunds of transaction and clearing fees.
Market Maker can also enter quotes with an arbitrary bid/-ask spread that exceeds the maximum spread. Wide quotes will not:
Quotes that have lost one side via complete matching will also be flagged as "Wide Quotes". That is, a "good quote" may turn "wide" if one side is fully matched.
While offering wide quote also Market Maker is not allowed to cross the permitted spread limit.