All brokers/trading members can participate in an auction. Clearing corporation prepares a list of short securities and sends it across all brokers/trading members who participate in the trading session on the day of Auction and place orders. A broker can place the orders of his own or his clients’ orders. A Member who has failed to deliver the securities of a particular company on the pay-in day is not allowed to offer the same in auction.
The following are different auction participants.
Initiator: The trading member who initiates the Auction. The initiator can give quotes either for buy or for sell order.
Competitor: The auction participant who quotes the orders on the same side of the initiator i.e. if the initiator gives bid quotes (buy order) then competitor also gives bid quotes.
Solicitor: The trading member who quotes the orders on the other side of the initiator i.e. if the initiator gives bid quotes (buy order) then competitor gives offer quotes (sell order).
