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

International strategic management, undertake a critical review of the curr...

undertake a critical review of the current academic literature to determine the reasons for benefits of and the costs to companies of cross listing.

What do you signify by investment decisions, Q. What do you signify by Inve...

Q. What do you signify by Investment Decisions? Investment Decision: - The most significant function of financial management isn't only the procurement of external funds for th

Changes in liquidity risk, Liquidity risk tends to change as and when...

Liquidity risk tends to change as and when there exists a change in the spread between the bid and the ask price. Market liquidity change is a matter of concern f

Can a corporation have too much working capital, Can a corporation have too...

Can a corporation have too much working capital?  Explain. A firm can have in excess of working capital if it is losing the opportunity to invest in high returning fixed assets

Determine about the sales agents, Determine about the Sales agents Norm...

Determine about the Sales agents Normally used for more effective sales and marketing activities for a product for example AVON (cosmetics) door to door agents in the UK. -

Cash budget, stauffer , inc., has estimated sale and purchase requirments f...

stauffer , inc., has estimated sale and purchase requirments for the last half of coming year. parepare cash budget for the month of

Theories of the term structure, There are two important term structur...

There are two important term structure theories related to the shapes of the yield curve. First is the Expectations Theory and the second is Market Segmentations

Portfolio management a financial tool for a firm''net worth, I need your...

I need your assistance on how to group the relevant data so as to help me in the data analysis

Scenario analysis for a portfolio manager, A portfolio manager would ...

A portfolio manager would never prefer to make investment decision based on just one set of assumptions. Instead, he would evaluate the outcome of the selected st

Explain zero coupon bonds, Explain Zero coupon bonds The bonds that are...

Explain Zero coupon bonds The bonds that are sold at a discount from face value and do not pay any coupon interest over their life are known as Zero coupon bonds. At maturity t

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