Nairobi, April 25 -- A few months ago, the Capital Markets Authority (CMA) said it was considering licensing a new class of market participants - broker-dealers - with a view of improving liquidity on the Nairobi Securities Exchange (NSE).

The idea is set on introducing market-makers for the stock and derivatives markets to ensure liquidity and raise price-determination efficiency. However, many are yet to understand the value and the role of these participants. Let's unpack this side of the market.

Who are market makers (also known as price-makers or price-givers)? These are market participants who quote both a buy and a sell price for financial instruments such as stocks and bonds.

They quote both sides of a price with the aim of mak...