TY  - UNPD
A1  - Draus, Sarah
T1  - Does inter-market competition lead to less regulation?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2010,13
N2  - This paper presents a model to analyze the consequences of competition in order-flow between a profit maximizing stock exchange and an alternative trading platform on the decisions concerning trading fees and listing requirements. Listing requirements, set by the exchange, provide public information on listed firms and contribute to a better liquidity on all trading venues. It is sometimes asserted that competition induces the exchange to lower its level of listing standards compared to a situation in which it is a monopolist, because the trading platform can free-ride on this regulatory activity and compete more aggressively on trading fees. The present analysis shows that this is not always true and depends on the existence and size of gains related to multi market trading. These gains relax competition on trading fees. The higher these gains are, the more the exchange can increase its revenue from listing and trading when it raises its listing standards. For large enough gains from multi-market trading, the exchange is not induced to lower the level of listing standards when a competing trading platform appears. As a second result, this analysis also reveals a cross - subsidization effect between the listing and the trading activity when listing is not competitive. This model yields implications about the fee structures on stock markets, the regulation of listings and the social optimality of competition for volume. JEL Classification: G10, G18, G12
T3  - CFS working paper series - 2010, 13 
KW  - Competition in Order Flow
KW  - Fragmentation
KW  - Listing Requirements
KW  - Stock Exchanges
KW  - Auftragsabwicklung
KW  - Börse
Y1  - 2010
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/7906
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-78654
ER  -