The Commission's regulations have been most effective in protecting investors when their effect has been to encourage greater competition among market participants. Market intermediaries, like Herzog Heine Geduld, play a vital role in the furtherance of a national market system by maintaining fair and orderly markets. We commit significant amounts of capital and provide an important source of liquidity to our securities markets, especially during periods of market stress. But these important market functions are not provided out of altruism. Instead, they result from our desire to provide better service to our customers and thereby maintain a profitable business from the orders they send to us.
Market makers recognize the importance of customer order flow for the success of their business.
In that respect, the business of market making resembles other familiar dealer markets. The grocer, for example, who offers milk to the public hopes to profit by filling customer orders from inventory. The market making business, like the grocery business, thrives on significant customer order flow and perishes without it. Because of the importance market makers place on customer orders, we vigorously compete for order flow on many different levels. First, we continually seek to provide the best possible execution for our customers, and at a minimum this means the best price reasonably available in the markets to which we have access.