1.5 The Stock Exchanges (NYSE & DMMs)
Stock exchanges provide centralized, regulated order-driven auction marketplaces where buyers and sellers meet.
Key FINRA Exam Takeaways
- Physical auction market: The New York Stock Exchange (NYSE) is historically an auction market.
- Designated Market Maker (DMM): Specialist assigned to each stock who facilitates price discovery, acts as auctioneer, and trades for their own account to maintain price continuity.
- Listing requirements: Exchanges have strict listing criteria (market capitalization, public float, number of shareholders).
Knowledge Checkpoint • Section 1.5
On the floor of the New York Stock Exchange (NYSE), who is responsible for maintaining a fair and orderly market in an assigned security?