Home FCA Handbook SSR SSR 5 SSR 5.18 Guidance on market making activities that fall within paragraph (b) of the Glossary definition of market making activities: as part of its usual business
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SSR 5.18 Guidance on market making activities that fall within paragraph (b) of the Glossary definition of market making activities: as part of its usual business

13/07/2026G

To demonstrate that a person’s market making activities involve, as part of its usual business, fulfilling orders initiated by clients or in response to client’s request for trade, a person should provide evidence upon request from the FCA that it:

  1. (1) regularly provides prices to clients or maintains the ability to provide a quote in response to client demand; and   
  2. (2) stands ready to trade with clients upon request.
13/07/2026G
  1. (1) Further to SSR 5.18.1G, the FCA will consider whether, and to what extent, the person already deals on a frequent and systematic basis in the financial instrument for which the person is using the market maker exemption, when fulfilling client orders or responding to clients’ requests.
  2. (2) If the market making activity is performed in financial instruments that are traded on an ad-hoc and infrequent basis, it is decisive if the person is at all business times ready and prepared to provide prices to clients and stands ready to trade in response to clients’ requests with a reasonable expectation to trade in any financial instrument requested by a client.
  3. (3) A presentation of the underlying business strategy could be used as relevant evidence to support eligibility of a person’s activity under paragraph (b) of the Glossary definition of market making activities for the market maker exemption; this presentation should include:
    1. (a) the scale of that activity (for which the market maker exemption is being notified) in comparison to the overall proprietary trading of the entity;
    2. (b) where the person does not yet deal on a frequent and systematic basis in the relevant financial instrument to fulfil client orders or to respond to clients’ requests:
      1. (i) whether it has a reasonable expectation that it will do so in the future;
      2. (ii) the basis for that expectation;
      3. (iii) the business assumptions that justify it (including in relation to its dealing for clients in other financial instruments); and
      4. (iv) whether reasonable expectation of dealing in a particular financial instrument can be referred to in a notification to the FCA.