Trends in the European securities industry

/ edited by Valer Lazzari. - Milano : Egea, 2011. - xvi, 277 p. ; 24 cm. - Sul front.: Emittenti titoli. - ISBN 978-88-238-4280-9.

This book presents the results of new research promoted by Emittenti Titoli on the evolutionary trends in the European securities industry, with some special regard to the Italian financial market.

The studies collected in the volume deal with the costs and quality of listing, trading, post-trading and regulatory services offered by exchanges, other trading platforms, central depositories, intermediaries and regulatory agencies, from the viewpoint of the issuers. They shed light on some topical problems that issuers must confront when they decide to go and stay public.

INDICE

PREFACE	IX
INTRODUCTION	XI
Ch.1 GOING PUBLIC AND LISTING FEES AROUND THE WORLD - Manuela Geranio and Valter Lazzari	1
1 Introduction	1
2 Becoming a Public Company: What Does It Mean Nowadays?	5
2.1 Going and Being Public in an EU Regulated Market	5
2.2 Going and Being Public in a Self Regulated Market	6
2.3 Going and Being Public in Non-EU Jurisdictions	9
3 Listing Services	12
4 Admission Fees: Rationale and Structure	14
4.1 Fec Floorand Cap	19
4.2 A Comprehensive Comparison	23
5 Annual Fee: Rationale and Structure	27
5.1 Fee Floor and Cap	27
5.2 A Comprehensive Comparison	30
5.3 Annual Listing Costs: the BIT Case	32
6 Fee Comparison over Time	36
7 Admission and Annual Fees in Self Regulated Markets	37
8 Listing Fees for Corporate Bonds and Warrants	40
9 Exchange Fees for Further Corporate Actions	41
10 Regulatory Fee Due to the Authority	42
11 Conclusions	47
References	49
Ch.2 AN ASSESSMENT OF THE QUALITY OF LISTING SERVICES: THE ITALIAN CASE - Valter Lazzari and Giovanna Zanotti	51
1 Introduction 51
2 The Design of the Experiment	53
3 The Description of the Sample	55
4 The Support in Fulfilling the Reporting Obligations	58
5 The Support for Corporate Actions	63
6 The Educational Services	67
7 The "investor Relations" Service	70
8 Ancillary Services	73
9 The Costs of Being Public	75
10 The Financial Supervisory Authority	77
10.1 The Quality of the Interaction	77
10.2 The Costs of the Domestic Financial Service Authority	80
11 The Overall Costs of Being Listed	82
12 Conclusions	87
References	88
Ch.3 THE EMERGING LANDSCAPE IN EUROPEAN SECURITIES TRADING - PeTer Gomber and Marus Gsell	89
1 Introduction	89
2 Requirements on Capital Markets: The issuers Perspective	90
2.1 Market Integrity	91
2.1.1 Fairness of Markets	92
2.1.2 Efficient and Correct Valuation	92
2.1.3 Regulatory Responsibility	93
2.2 Market Quality	93
2.2.1 Liquidity	94
2.2.2 Volatility	94
2.3 Visibility	94
3 Regulatory Changes to the European Securities Trading Landspe	95
3.1 The Trading Landscape Before MiFID	95
3.2 MiFID: The New Regulatory Framework in Europe	96
3.2.1 New Market Venues	97
3.2.2 Pre- and Post-Trade Transparency	99
3.2.3 Best Execution	101
3.3 MiFID vs. RegNMS: A Comparison of EU and US Regulation	102
3.3.1 Market Venues: MTFs vs. ECNs	102
3.3.2 Best Execution: EU Pre-Trade Transparency vs. US Trade-Through Rule	103
3.3.3 Market Data: EU Post-Trade Transparency vs. US Consolidated Tape	104
4 MiFIDs Implications for Trading	104
4.1 Market Models	105
4.1.1 Regulated Marketsand MTFs	105
4.1.2 Internalisation: Systematic lnternalisers	109
4.1.3 Block Trading: Crossing Networks / Dark Pools	110
4.2 Market Fragmentation	112
4.3 Market Data	117
4.3.1 Pre-Trade Market Data	118
4.3.2 Post-Trade Market Data	118
4.4 MiFID Review 20l0	119
5 Conclusion I Policy Implications for Issuers	120
References	121
Ch. 4 THE FRAGMENTATION OF THE EUROPEAN EQUITY MARKRT - Stephen Grob	127
1 Introduction 127
2 MiFID in a Global Context: Rules vs. Principles Based Regulation	128
3 The impact of MiFID	130
4 Increased Competition: Fragmentation across Lit Venues	132
4.1 New Venues versus Established Exchanges	138
5 Increased Competition: Fragmentaon across Lit and Non-Lit Venues	142

6 Order Execution in a Fragmented World	147
6.1 Average Trade Size	147
6.2 The Role of High Frequency Trading in Fragmenting European Liquidity	151
6.3 Does Fragmentation Provide Better Execution?	152
7 Dark versus Lit Liquidity	155
7.1 Impact on Price Formation	160
8 The Consolidated Tape	161
8.1 Pre-Trade Considerations	161
8.2 The Post-Trade Issue	163
8.3 A Simple Solution	164
9 The New Liquidity Landscape and the Shape of Things to Come	165
10 Conclusions	167
Appendix	168
Ch.5 THE QUALITY OF EUROPEAN EQUITY MARKETS AFTER MiFID - Peter Gomber, Markus Gsell and Marco Lutat	171
1 Introduction	171
2 Fragmentation of Liquidity	172
2.1 How MiFID Drives Fragmentation	172
2.2 Liquidity and Cost of Capital	174
3 Impact of Fragmented Liquidity on Market Quality: Empirical Analysis	174
3.1 Methodology	175
3.1.1 Data Aggregation	175
3.1.2 Regression Model	176
3.2 Observation Periods	177
3.3 Sample	178
3.4 Results	181
4 Market Integrity - Price Manipulal ion at the Close: Empirical Analysis	186
4.1 Methodology	186
4.2 Samples and Observation Periods	187
4.3 Results	187
5 Conclusion I Policy Implications for Issuers	188
References	190
Ch.6 THE EMERGING LANDSCAPE OF THE EUROPEAN POST-TRADING INDUSTRY - Peter Gomber and Torsten Schaper	193
1 Introduction	193
2 Interests of Issuers in the European Post-Trading System	194
3 The European Post-Trading Landscape	197
3.1 The Post-Trading Value Chain	197
3.2 Post-Trading Functions and Institutions	198
3.3 Business Models in European Post-Trading	201
3.4 Regulation and Market Initiatives in European Post-Trading	203
4 Evaluation of Post-Trading Projects from the Perspective of the Issuers	211
4.1 Evaluation of Regulation	212
4.1.1 MiFID and Further EU Regulatory Initiatives	212
4.1.2 European Code of Conduct for Clearing and Settlement	213
4.2 Evaluation of Technical Platforms	214
4.2.1 T2S	214
4.2.2 Link Up Markets	216
4.2.3 SSE/ESES	216
4.2.4 CCBM2	217
5 Summary and Outlook	217
References	218
Ch.7 THE ISSUERS PERSPECTIVE ON POST-TRADING BARRIERS - Peter Gomber and Torsten Schaper	223
1 Introduction	223
2 Barriers for Issuers in European Post-Trading	224
2.1 Shareholder Visibility Issues based on Legal Barriers	228
2.2 Shareholder Visibility Issues Based on Differences in Market Practice and Technical Barriers	230
3 Case Study on Issuers in European Post-Trading	231
3.1 Research Approach	231
3.2 Results of Issuers Cases	232
4 Case Study on Technical Infrastructures that Aim to Improve European Post-Trading	236
4.1 Research Approach	236
4.2 Results of Technical Infrastructures Cases	237
4.3 Proposal on Shareholder Visibility	240
5 Conclusions	242
References	243
Ch.8 SHAREHOLDER IDENTIFICATION AND CORPORATE ACTION IN EUROPE - Valter Lazzari, Giuseppe Lazzari e Mario Maglione	245
1 Introduction	245
2 Alternative Legal Framework of Stock Ownership	248
2.1 Type of Common Stocks: Bearer Stocks vs. Registered Stocks	248
2.2 Transferring Stock Ownerships	251
2.3 Updating the Shareholder Register	255
2.3.1 The Timing of the Registration	255
2.3.2 The Content of the Registration	258
3 Shareholder Transparency and the Execution of Corporate Actions	258
4 Distributions	262
5 Mandatory Reorganization with Options	263
6 Shareholders Meetings	264
7 Towards the European Standards	269
8 Summary and Conclusions	274
AUTHORS	277