Description
Book SynopsisThe efficiency of financial markets depends on the operation of core infrastructure - exchanges, central counter-parties, and central securities depositories. This book examines how markets are, and should be, run. It evaluates the similarities and differences between exchanges, central counter-parties, and central securities depositories.
Trade Review"Overall, this excellent work is a must-read for anybody involved in the regulation of market infrastructure institutions. It provides valuable lessons and cautionary tales for how to create a sturdy and stable financial market infrastructure."--Journal of International Banking Law and Regulation
Table of ContentsForeword and Acknowledgments xi List of Acronyms xiii Introduction 1 Nature of Governance 1 Concerns 2 Issues 3 Approach 3 Structure 4 Part One: Background Information and Analysis 7 Chapter One: Definitions 9 Infrastructure 9 Exchanges, Central Counterparties, and Central Securities Depositories 21 Conclusions 36 Chapter Two: Market Power 40 Preliminary Comments 40 Exchanges 45 CCPs 61 CSDs 71 Conclusions 81 Part Two: Survey Evidence 83 Chapter Three: The Allocation of Regulatory Powers over Securities Markets 85 World Federation of Exchanges 85 International Council of Securities Associations 88 Infrastructure Institutions in Major Markets 90 Conclusions 114 Chapter Four: Regulation and Governance of MarketInfrastructure Institutions: Global Perspective 117 The Financial Sector Assessment Program and Securities Markets Assessments 117 Observations 125 Conclusions 141 Chapter Five: Governance of Market Infrastructure Institutions: A Snapshot 145 Data 146 Analysis 151 Conclusions 164 Part Three: Case Studies 167 Chapter Six: Exchanges 169 Deutsche Borse / London Stock Exchange: Proposed iX Merger 2000 170 Euronext: Purchase of LIFFE 2001 177 Hong Kong Exchanges and Clearing: The Penny Stocks Incident 2002 180 NASDAQ: Attempted Takeover of London Stock Exchange 2006-8 189 New York Stock Exchange: Resignation of Chairman-CEO 2003 194 Osaka Securities Exchange: "Murakami Fund" Purchase of Shares 2005 198 Chapter Seven: CCPs and CSDs 201 Canadian Depository for Securities: Ownership, Usage, and Board Representation to 2008 201 Depository Trust & Clearing Corporation: EuroCCP 2000-2002 207 Deutsche Borse: Creation of Clearstream International 1999-2002 213 Euroclear: Creation, Ownership, and Board Structure up to 2006 217 LCH.Clearnet: Creation and Difficulties 2003-6 231 Part Four: Policy Analysis and Recommendations 245 Chapter Eight: What Is the Most Efficient Governance Structure? 247 Ownership and Mandate: Archetypal Models and Primary Goals 248 Ownership Model and Mandate: Critical Factors Affecting Efficiency 253 The Board: Role and Composition 276 Concluding Discussion and General Propositions 293 Chapter Nine: Who Should Regulate What? 301 Complexity 301 Factors and Constraints Affecting Relative Merits of Different Allocation Structures 307 Concluding Discussion and General Propositions 334 Chapter Ten: How Should Market Infrastructure Institution Governance Be Regulated? 339 Preliminary Comments 339 Investor Protection 342 Efficiency, Fairness, and Transparency 348 Systemic Risk Reduction 353 Concluding Discussion and General Propositions 357 Authorities 363 Cases and Decisions 365 Notes 367 References 395 List of Contributors 433 Index 437
