es Dealers Operations Center in Rockville, Maryland. The Maryland complex houses a redundant and a complete backup of the Central Computer Complex.
The primary difference between NASDAQ and other security exchanges is that NASDAQ relies on "market makers" instead of regular "stock brokers". "On average there are nine market makers for each security listing. For the most active listings there could be as many as forty market makers for each listing, depending on security activity" ("Market Makers" 2000 Online).
A Market Maker is an independent dealer who competes for investor orders by displaying quotations representing their buy and sell interestùplus customer limit ordersùin NASDAQ-listed stocks. Each Market Maker has equal access to the trading system, which broadcasts their quotations simultaneously to all market participants. By standing ready to buy and sell shares of a company's stock, Market Makers provide NASDAQ-listed companies the primary vehicle for selling their stocks, thereby raising capital.
Currently, more than 500 market making firms provide capital support for all NASDAQ-listed stocks. All are required to:
* Disclose their buy and sell interest by displaying two-sided quotes in all stocks in which they choose to make a market.
* Display both quotes and orders in NASDAQ, in compliance with the Securities and Exchange Commission's (SEC) Order concerning Handling Rules.
* Honor their quoted prices and report trading in a timely
manner. Failure to do so can lead to disciplinary action.
These Market Makers aggregate by choice into several different categories. These categories include: "Institutional Market Makers" (focusing on executing large block orders for pension funds, mutual funds, insurance companies, and asset management companies); "Regional Market Makers" (focusing on the companies and investors of a particular region); "Wholesale Market Makers (focusing on institutiona...