Australian (ASX) Stock Market Forum

How does Interactive Brokers act as a market marker on the SFE?

15 October 2007
This Reuters description of IB and its role as a market maker has got me wondering:

Interactive Brokers Group, Inc. (IBG, Inc.) is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on more than 80 electronic exchanges and trading venues worldwide. It operates in two segments: market making and electronic brokerage. As a market maker, IBG, Inc. provides continuous bid and offer quotations on over 600,000 securities and futures products listed on electronic exchanges worldwide ...

The Company’s international market making subsidiaries, primarily Timber Hill Europe AG (THE), conduct operations in 23 countries, comprising the securities markets in these regions. Its Hong Kong subsidiary, Timber Hill Securities Hong Kong Ltd (THSHK), is a member of the cash and derivatives markets of the Hong Kong Exchanges. Its Australian subsidiary, Timber Hill Australia Pty Ltd (THA), is a member of the Australian Stock Exchange, and routes orders for its trading on the Sydney Futures Exchange, through its affiliate, Interactive Brokers LLC.

So IB is market making on the SFE, while at the same time it is surely the biggest retail broker in SFE markets.

Um, isn’t there a huge conflict of interest here? Is IB trading against its brokerage customers on the exchange, or is IB creating its own market?
I think its a big player in oppies, Timber Hill, not futs in Oz. And its certainly not anywhere near the biggest volume maker on the SPI. They will be banging their head against a bigger dick trying to move it to take out your 2 lot SPI stop. IMO