FACING NEW REGULATORY FRAMEWORKS IN SECURITIES TRADING IN EUROPE

Transcription

1 FACING NEW REGULATORY FRAMEWORKS IN SECURITIES TRADING IN EUROPE Peter-Jan ENGELEN Karel LANNOO (eds.) intersentia Antwerp - Oxford - Portland

2 TABLE OF CONTENTS PREFACE THE FRONT OFFICE - TRADING MECHANISMS THE FRONT OFFICE - INTRODUCTION 3 Demutualisation 4 Consolidation 5 Technological Evolution 6 Regulatory Changes Due to the Emergence of ATSs 7 Bibliography 8 RegNMS: A TRADE-OFF BETWEEN SHORT TERM ECONOMIC EFFICIENCIES AND LONG TERM DYNAMIC PERFORMANCE Anastassios GENTZOGLANIS Introduction, An Analytical Framework for Evaluating the RegNMS in the Securities Industry Literature Review on Competition, Fragmentation and Efficiency Conduct and Performance of ATS in the US and the Role of Regulation Conclusions and Policy Recommendations 28 Bibliography 29 REGULATION AND TECHNOLOGY IN EQUITY TRADING. The Impact of Regulatory and Technological Changes on Order Execution and the Trading Venue Landscape in Europe Peter GOMBER, Markus GSEIX, Gregor PUJOL and Adrian WRANIK Introduction Literature Overview Development and Status Quo of the ECN/MTF Landscape ECN/MTF Development in Europe versus the US Recent Technological Improvements and Competitive Dynamics 36

3 4. New Regulatory Regimes on both Sides of the Atlantic RegNMS in the US MiFID in Europe MiFID's Impact on Order Routing, Market Transparency and Best Execution Conclusions and Outlook 49 Bibliography 50 DARK LIQUIDITY POOLS: ISSUES IN COMPETITION, DESIGN AND REGULATION OF CROSSING NETWORKS Hans DEGRYSE, Mark VAN ACHTER and Gunther WUYTS Introduction Institutional Fingerprints of Crossing Networks Competition Between Crossing Networks and Traditional Markets: Theory Static Models Dynamic Model of CN-DM Interaction Crossing Networks and Traditional Markets: Empirical Evidence Market Design of Crossing Networks Base Market Dependence and Critical Mass Transparency Practitioner's View on Market Design New Trading Platforms in Europe and MiFID Conclusions 73 Bibliography 74 FINANCIAL REGULATION OF THE SECURITIES INDUSTRIES: AN INTERNATIONAL OR COUNTRY SPECIFIC APPROACH? Anastassios GENTZOGLANIS Introduction Evaluation Criteria of the Level of Competition and Monopoly in the Securities Industry The Current Regulatory Approaches to Securities Industry The Alternative Regulatory Approaches to Securities Industry A Critical Evaluation of Current Regulatory Changes in the Securities Industry Conclusions and Policy Recommendations 92 Bibliography 93 Vlll

4 THE BACK OFFICE - CLEARING AND SETTLEMENT THE BACK OFFICE- INTRODUCTION 97 Bibliography 99 NETWORK ECONOMICS WITH APPLICATION TO CLEARING SERVICES AND THEIR IMPACT ON THE ORGANISATION OF THE EUROPEAN CLEARING INDUSTRY Tina HASENPUSCH Introduction, The Value Provision Network Structure of the Value Provision Network Clearing Member Types Structural Particularities of the European Value Provision Network Network Effects in the European Value Provision Network The Value Provision Network as Two-Layered and Two-Level Network First Level (CCP Level) Network Effects First Level Network Effects: Product Layer First Level Network Effects: System Layer Second Level (GCM Level) Network Effects Second Level Network Effects: Product Layer Second Level Network Effects: System Layer Interrelation Between CCP and GCM Level Network Effects Spill-Over Effects of CCP and GCM Level Network Effects Implications for the Organisation of the European Clearing Industry Conclusions 123 Bibliography 124 ELIMINATION OF TECHNICAL BARRIERS IN EUROPEAN SECURITIES SETTLEMENT Torsten SCHAPER Introduction Clearing and Settlement of Securities Transactions Integration of Securities Settlement Systems Standards in Securities Settlement CSD-LinkModel 134 lx

5 3.3. Hub and Spokes Model Central Securities Settlement Institute TARGET2-Securities European CSD Single Settlement Engine Evaluation of Models for Integration Conclusions and Outlook 144 Bibliography 144 SYSTEMIC RISK IN CENTRAL COUNTERPARTIES CLEARINGHOUSES Silvia CASERTA Introduction Market Structure System Reliability Duopoly Monopoly Interoperability Comparison of Systems Failure Conclusions 157 Bibliography 158 INTEGRATING EUROPE'S BACK OFFICE: 10 YEARS OF TURNING IN CIRCLES Karel LANNOO and Diego VALIANTE The ECB and T2S What is Left for CSDs and ICSDs? The ESCB-CESR Recommendations The Code of Conduct The Impact of the Financial Crisis: Multiple or Centralised Solution(s)? Conclusions 176 Bibliography 177 SHORT BIOS 179 CONTACT DATA 183