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Creating Securities Markets in Developing Countries: A New Approach for the Age of Automated Trading[Note 1. I am grateful to Ian Domowitz, Bob Litan and ...]
Author(s) -
Steil Benn
Publication year - 2001
Publication title -
international finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 39
eISSN - 1468-2362
pISSN - 1367-0271
DOI - 10.1111/1468-2362.00073
Subject(s) - alternative trading system , electronic trading , corporate governance , internationalization , financial market , business , frontier , economics , emerging markets , algorithmic trading , trading turret , developing country , finance , international economics , open outcry , international trade , archaeology , history , economic growth
The past decade has been one of enormous change in the securities trading industry. Automation of trading systems, led by the continental European exchanges and US ‘electronic communications networks’ (ECNs), has resulted in significant declines in trading costs, massive increases in turnover, internationalization of trading and settlement system operations, and major reforms in exchange governance. Yet the policy advice given to developing country governments looking to create or expand securitized finance in their markets has been largely unaffected by these developments. This is unfortunate, as developing countries now have the opportunity to leapfrog the evolving infrastructure of the mature markets and to define the global efficient frontier in trading technology, exchange governance, investor access and market structure regulation. This paper analyses the technological and economic forces driving change in the securities trading industry, and examines the implications for developing markets.