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

Why total assets equal the sum of total liabilities & equity, Why do total ...

Why do total assets equal the sum of total liabilities and equity?Explain. Assets = Liabilities + Equity Assets are the entities of value a business owns. Liabilities ar

Determine marginal tax rate, Q. Determine marginal tax rate? Ans. ...

Q. Determine marginal tax rate? Ans. Henkel does not carry debt beyond five years. To determine the cost of debt: a. For Henkel AG, which Treasury rate at which maturit

Annual effective rate, You have recently won the UniSA "log tossing" compet...

You have recently won the UniSA "log tossing" competition. The prize of $200 is supposed to be used to buy a 50-year subscription to "Log News" This appears to represent a consid

Disadvantage or redundancy of excessive working capital, Q. Disadvantage or...

Q. Disadvantage or redundancy of excessive working capital? Excessive working capital means idle funds which earns no profit for the business operation it should have nighters

Business venture, Project Plan for my new business venture is attached) ...

Project Plan for my new business venture is attached) 1.     Your task is to take a look at every of the operational areas of the intended business, and verify  what financial i

Write the format to place the order, Write the format to place the order. W...

Write the format to place the order. What are the risks involved in the delivery of products. Format of the order: ? Purchase order ? Acknowledgement form ? Material requisitio

Explain due date and due diligence, Q. Explain Due Date and Due Diligence? ...

Q. Explain Due Date and Due Diligence? Due Date -Every governing agency and its forms scheduled reporting and most significantly payments have a required due date. It's this

Bse-500 and sectoral indices, BSE-500 and Sectoral Indices On August 9,...

BSE-500 and Sectoral Indices On August 9, 1999, another new index was introduced in the market which was based on the data of 500 companies and designated as BSE-500 index. It

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