Information Technology and the Organization of Securities Markets

What the future holds for securities markets is of course a remarkably broad question, and undoubtedly designed by the conference organizers to be so. In order to keep from lapsing into free association, therefore, I will take the issue of technology and its implications for the future of securities markets to include the following pair of questions: First, will technology tend to increase or decrease the importance of securities as a financing vehicle in comparison to such alternative financial transactions as bank loans, capital leases, franchising relationships, and so on? Second, what changes will technology produce in the structure of primary and secondary securities markets? I take up these questions in order.

Norms and Signals: Some Skeptical Observations

Law and Social Norms is just what the growing field of norms scholarship needed. Legal scholars have generated an impressive body of observations about the myriad situations in which individuals pressure one another to act civilly. Eric Posner\u27s book provides a simple, elegant model with very few working parts and promises to go a long way toward connecting these observations to form a coherent whole

What is a managed apprenticeship?

This paper describes an investigation into apprenticeship-type training programmes offered by tertiary education institutions. Summary Most people who qualify for a trade do so via the industry training system, in an in-work and off-job training arrangement organised through an industry training organisation (ITO). Some polytechnics and institutes of technology (ITPs) also offer workplace-based training leading to qualifications that are the same as those offered through ITOs. These ITP programmes are often referred to as \u27Managed Apprenticeships\u27. The fact that there are two pathways to trades qualifications has led to speculation about the quality and value of the two approaches. However, because we haven\u27t had information about which programmes and which institutions follow an apprenticeship model, there has been little evidence on which to base detailed analysis. We have conducted a search of ITP programmes, consulted with ITPs and have analysed administrative data to identify Managed Apprenticeships – where it is clear that there is similar provision across the ITP and the industry training sectors. The scope of this search was on programmes that most closely resembled New Zealand Apprenticeships, that is we define a Managed Apprenticeship as follows: the apprentice is enrolled at a polytechnic or institute of technology study leads to a national qualification at Level 4, consisting 120 or more credits study is funded through the student achievement component the participants are in work and training in a field that applies to their employment training is governed by a tripartite training agreement between the institution, the apprentice and the employer ITOs have little or no involvement in training administration

Technology, Property Rights in Information, and Securities Regulation

This Article will make three observations about the impact of technology on securities markets and securities regulation. First, the cost of transmitting, storing and manipulating data is a very minor component of the social cost of mandatory corporate disclosure; therefore, the welfare effects of mandatory disclosure are not very sensitive to advances in IT. Second, the traditional intermediaries of securities markets, such as brokers, dealers, and exchanges, serve a variety of purposes besides matching buyers and sellers. Third, advances in IT are unlikely to eliminate informational asymmetries in the securities markets directly through the transmission of data to traders; instead, they will alleviate asymmetries indirectly by making arbitrage more effective and prices more informative

Equity Market Structure Regulation: Time to Start Over

Over the past half-century, the U.S. Securities and Exchange Commission (SEC)’s regulations have become key determinants of the way in which stocks trade and the fees that exchanges charge for their services. The current equity market structure rules are contained primarily in the SEC’s Regulation NMS. The theory behind Regulation NMS is that a system of dispersed markets operating pursuant to SEC-mandated information and order routing links will provide the benefits of consolidation and competition simultaneously. This article argues that Regulation NMS has failed in that quest. It has produced fragmented markets and created questionable incentives for market participants, possibly producing socially excessive investments in trading speed and secrecy. It also discourages exchange innovation, provides insufficient incentives for traders to price orders aggressively, requires brokers to act against their customers’ interests, and forces the SEC to act as a price regulator. The article contends that the SEC should replace Regulation NMS with three simple design principles—issuer choice, exchange autonomy, and regulatory consistency. These would allow market forces, rather than regulatory mandates, to determine the design and pricing of trading platforms and the trading strategies of broker-dealers. They would better align the private incentives of trading platforms with the social objectives of improving liquidity and price discovery