What are the regulations governing derivatives market makers?

Derivatives market makers are subject to the regulations created by the Alternative Investment Law in New York. This law was developed by the New York State Department of Financial Services in order to protect investors and ensure the proper operation of the derivatives markets. These regulations are designed to ensure transparency and fairness in the trading of derivatives. Market makers must register with the DFS and must be approved by the DFS after completing an application process. The DFS also requires market makers to maintain certain capital requirements in order to ensure that they can maintain liquidity in the derivatives markets and prevent market manipulation. The Alternative Investment Law also regulates the use of leverage by market makers. Leverage is a type of financial instrument that allows market makers to increase profits by taking on greater risk. The DFS imposes strict limits on the amount of leverage that market makers can use in order to protect investors from excessive risk. Finally, market makers are subject to restrictions on their activities. These restrictions include limits on the types of transactions they can enter into and the types of products they can trade. The DFS also requires market makers to provide customers with accurate pricing information and to ensure that their operations are conducted in accordance with all applicable laws and regulations.

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What are the regulations governing derivatives market makers?

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