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

Treasury auction process, All treasury securities are issued on the b...

All treasury securities are issued on the basis of auction. The auction process is computerized and hence qualified broker-dealers can access it electronically. T

Explain stronger dollar in the foreign exchange market, What kinds of U.S. ...

What kinds of U.S. companies would benefit most from a stronger dollar in the foreign exchange market?  Explain. U.S. companies that import merchandise from other countries wou

Weighted average, Saven Travel Corporation is considering several investmen...

Saven Travel Corporation is considering several investment opportunities in order to diversify its operations. Mr. Saven, president, is trying to determine the firm''s cost of capi

Demand and supply shocks, Demand and Supply Shocks The influence of the...

Demand and Supply Shocks The influence of the above macroeconomic factors on the economic performance can be analyzed by classifying their impact on the economy as a supply or

Investment opportunities in capital budgeting process, Briefly examine the ...

Briefly examine the significance of identification of investment opportunities in capital budgeting process

Find out the price of the swap from corporation's viewpoint, A company ente...

A company enters into a five-year interest rate swap along with a swap bank where it  agrees to pay the swap bank a fixed-rate of 9.75 percent yearly on a notional amount of DM15,0

Domestic bonds, They are issued in the local market by a domestic bor...

They are issued in the local market by a domestic borrower and are usually denominated in the local currency. For example, US companies issuing bonds to US reside

Discount rate determinants, Discount Rate Determinants The discount rat...

Discount Rate Determinants The discount rate is the firm weighted average cost of capital. It represents the opportunity cost of investing creditors and shareholders funds in o

Portfolio duration, We can measure the portfolio duration by calculat...

We can measure the portfolio duration by calculating the weighted average of the duration of the bonds in the portfolio. The proportion of the portfolio that a se

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