This is the first major treatment of the effects of increased transparency on financial markets: an important and highly controversial issue for both traders and regulators. Focussing on three main themes - market transparency, the consolidation-fragmentation of trading systems, and the scope of regulation (i.e. which markets, and which traders within those markets, should be subject to regulation), the book highlights the importance of these issues to all markets throughout the world. The book draws on research from eight UK based investment exchanges, Deutsche Borse in Frankfurt and documentary evidence from the US markets and their regulators enabling the identification and documentation of the current situation and consideration of what fresh regulatory approaches are required for this new and fast evolving situation.
Orderly Markets: A Summary of the Arguments
Orderly Markets: Summary
Summary and Conclusions
The Recognised Investment Exchanges
Fragmentation and Consolidation
The Regulation of Transparency
Over the Counter (OTC) Markets
Appendix 1: RIE Results
Appendix 2: Fragmentation and Consolidation
Appendix 3: Trading Systems: Theoretical and Empirical Literature
Appendix 4: Theory and Results of Transparency
Appendix 5: Bid-Ask Spreads under Different Market Structures
Appendix 6: Cross-Listing: Empirical Evidence
SUMMARY AND CONCLUSIONS
Introduction and Terms of Reference
Objectives and Scope of Market Regulation
Convergence and Divergence
The UK RIEs
Emergence of Contestability
The Investment Chain
Consequences of the Investment Chain Approach
Regulatory Challenges in Fragmented Markets
Specific Regulatory Challenges in Fragmented Markets
New Regulatory Framework
Summary of the Regime
JOHN BOARD is Reader in Accounting and Finance at the London School of Economics and a member of the Financial Markets Group.
CHARLES SUTCLIFFE is Professor of Finance and Accounting at the University of Southampton.
STEPHEN WELLS is a Researcher at the Financial Markets Group of the London School of Economics. He was formerly chief economist of the London Stock Exchange.
Printing of the book is limited to 10 pages per day.