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Financial Economists' Roundtable Statement on THE STRUCTURE OF SECURITIES MARKETS
Publication year - 2002
Publication title -
journal of applied corporate finance
Language(s) - English
Resource type - Journals
eISSN - 1745-6622
pISSN - 1078-1196
DOI - 10.1111/j.1745-6622.2002.tb00346.x
Subject(s) - financial market , order (exchange) , third market , business , private placement , broker dealer , competition (biology) , market system , market microstructure , economics , financial system , finance , investment banking , market economy , ecology , biology
Market practitioners, regulators, and economists are now debating the merits of a national market system—a single, fully integrated securities market that would be coordinated by a central computer and mandated by the SEC. This brief statement, signed by 29 distinguished financial economists, argues that such a system is a badidea. The multiplicity of U.S. markets is a sign of innovation and vibrant competition, not a problem that requires regulatory intervention. As a variety of markets with different technologies and trading procedures vie for somewhat different groups of customers with different needs, the result is competing market centers—registered exchanges (such as NYSE and AMEX) with designated specialists; NASDAQ with competing dealers; third market dealers in listed securities; and alternative trading systems (regulated as brokers) serving institutional investors or providing on‐line trading to individual investors. Moreover, the fact that the different U.S. markets are linked in various ways and degrees—for example, by information and by private order routing systems of brokers and markets—should caution us against viewing market “fragmentation” as a public policy problem in need of a solution