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A Look at the Globalization of the Exchanges and Its Effects on the United States Market Through an Analysis of the NYSE and Euronext Merger | Author: Christopher Osborne

A Look at the Globalization of the Exchanges and Its Effects on the United States Market Through an Analysis of the NYSE and Euronext Merger | Author: Christopher Osborne

The merger of the New York Stock Exchange Group and Euronext NV will create the first true global stock exchange entity spanning a network of five countries and twelve exchanges. The NYSE Group has also been in communication about cooperation, and even possible integration, with Borsa Italiana, the National Stock Exchange of India, and the Tokyo Stock Exchange. Many of the world’s exchanges are eager to consolidate, but not as a subordinate since many exchanges are sources of national pride and fiercely independent. Also, governments have historically taken an active interest in their exchanges, not just for national pride, but domestic regulatory security. Thus, when exchanges consolidate there is more at stake then simple business interests like reducing trading costs. This paper will analyze the development the globalization of exchanges through a critical look at the NYSE and Euronext merger, highlighting the requirements, the fears, and the expectations of the consolidating exchange market. Sections II, III and IV will look at the history of the New York Stock Exchange and Euronext and the development of the merger between them. Section V will consider the history of the Securities Exchange Commission regulation of United States’ exchanges and how the SEC has dealt with globalization as it affects the markets. Section VI will provide an overview of the financial benefits of the NYSE and Euronext merger. Section VII will contrast the evolution of the NYSE and Euronext merger to the situation of NASDAQ and the London Stock Exchange. Then, Section VIII will look at the effects market exchange globalization will have on investors and how the respective domestic regulatory authorities hope to deal with international exchanges and conflicting regulatory schemes. Finally, Section IX will conclude the analysis by offering a summary of the issues and thoughts of the future.

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