Regulatory Alerts2023-09-12
Proposed Amendment To Rule 234- Inter-Dealer Broker
The proposed amendment modifies the definition of an Inter-Dealer Broker (IDB) under Rule 234 to explicitly include participants in the Exchange-traded derivatives market alongside the existing bonds and OTC derivatives markets. This expansion aims to broaden the scope of permissible activities for IDBs within the capital market framework. The primary objectives of this change are to deepen market participation and enhance overall market liquidity.
Proposed Amendment To Rule 234- Inter-Dealer Broker
Details of the proposals are as follows:
Legend:
Additions are <u>underlined</u>
Deletions are struck through
Justifications are italicized
Name/citation of the Rule – Inter-Dealer Broker
Full text of Existing Rule Inter-Dealer Broker (IDB) means a financial intermediary operating in the bonds or OTC derivatives market, which acts as an intermediary between major dealers and other financial institutions in the capital market such as but not limited to brokers, market makers, pension funds, fund managers and insurance companies.
Proposed Amendment
Inter-Dealer Broker (IDB) means a financial intermediary operating in the bonds, or OTC <u>and Exchange-traded</u> derivatives market, which acts as an intermediary between major dealers and other financial institutions in the capital market such as but not limited to brokers, market makers, pension funds, fund managers and insurance companies.
Justification To expand the scope of the activities of Inter-Dealer Brokers and allow them participate in both OTC and Exchange-traded Derivatives markets with the overall objective of deepening the market and enhancing market liquidity.