Historical differences in equity securities, Financial Management

Assignment Help:

Public Bourses

The origin of this type of bourses can be found in the legislative work of Napoleon. These type of bourses are regulated by the government, brokers are appointed by the government and they command a complete monopoly over all the settlements. Brokerage firms are private and new brokers are proposed to the state for nomination by the brokers' association. Earlier stock exchanges in Belgium, France, Spain, Italy, Greece and some Latin American countries were run by their respective governments. Before deregulation, the Paris bourses were also of this type. Commissions and other relevant matters were decided by the government. The main beneficiaries of this system are brokers because they command complete monopoly as their number is fixed. Even for a private deal arranged by two banks, the transactions had to legally go through the brokers. Deregulation affects this kind of bourses, because brokers tend to lose their monopoly.

Private Bourses

Private Stock Exchanges are originally founded by the independent members for the purpose of stock trading. Several private stock exchanges can exist and operate within a country; for example, functioning of several stock exchanges in the US, Japan and Canada. However, in some countries like the UK, one prominent stock exchange dominates the other small stock exchanges. Although these bourses are private, they are not free of government regulation. A mix of self-regulation and government supervision is required to make all these exchanges Self-Regulatory Organizations (SROs). In private exchanges, members are supposed to perform all the work on the floor of the exchange and commissions are usually fixed in accordance with the agreement between stock exchanges and the public authority. Private bourses are active in Canada, Australia, South Africa and Japan.

Bankers' Bourses

In some countries, only banks are permitted to trade in stocks. For example, in Germany, the Banking Act allows only banks to function as brokerage firms and so they enjoy a complete monopoly. Bankers' bourses are found in some other countries like Austria, Switzerland and the Netherlands. These type of bourses can be private or semi-public entities. Their main function is to provide a convenient place for banks to interact. Many regional bankers' bourses are directly linked to the local Chambers of Commerce. Bankers can trade directly without any involvement of official bourses but regulation is applied to both - the bourses and the attached bank.

 


Related Discussions:- Historical differences in equity securities

Organization and management of mutual funds, Organization and Management of...

Organization and Management of Mutual Funds: Structural Pattern Mutual Funds, usually formed as trusts, generally involve three parties viz., Settler of the trust or

Bond ., The salem company bond currently sells for $955 has a 12% coupon i...

The salem company bond currently sells for $955 has a 12% coupon interest rate and $ 1000 par value pays interest annually an

International finance problem, International Finance Problem Analyze th...

International Finance Problem Analyze the attached case, along the lines indicated by the Assignment questions listed at the end of the case.  Since you will have plenty of tim

Advantages and disadvantages of internal rate of return, What are the advan...

What are the advantages and disadvantages of the internal rate of return method? The internal rate of return process is a discounted cash flow method and a number expressed as

Determine the net present value, The following information pertains to Fair...

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they wi

Explain medium term expenditure framework, Question 1: The various crit...

Question 1: The various criteria for evaluating a revenue measure or system are: ? Yield ? Political expediency ? Consistency with economic and social goals ?

Calculation of weighted average cost of capital, Calculation of Weighted Av...

Calculation of Weighted Average Cost of Capital The calculation of weighted cost of capital involves the following steps: (i) Calculate the cost of each source of funds.

Risk and advantages associated with company locations, What are some of the...

What are some of the primary advantages when a corporation has operations in countries other than its home country?  What are some of the risks? Foreign operations may decrease

Explain about changing debt, Is it possible to use a constant WACC in the v...

Is it possible to use a constant WACC in the valuation of a company with a changing debt? Theoretically, the WACC can only be constant if a constant debt is expected. If the de

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd