Onnig H. DombalagianFrom: Financial Market Infrastructures: Law and Regulation
Edited By: Jens-Hinrich Binder, Paolo Saguato
This chapter evaluates securities and derivatives exchanges in the United States. Securities and derivatives exchanges have long enjoyed a central role in the ordering of US trading markets, insofar as they established much of the contemporary framework for coordinating the interests and obligations of brokers, floor traders, specialists and market makers, listed companies and sponsors of exchange-traded products, and other market participants. Congress enshrined this role by vesting exchanges with broad rulemaking and disciplinary authority in eponymous legislation, while at the same time ensuring accountability through governance requirements, public transparency and access standards, and federal oversight of their self-regulatory activities. The past several decades have threatened to disrupt such arrangements as US exchanges have lost primacy of place in their respective markets. To face these challenges, exchanges have demutualized to compete more effectively with alternative trading venues, while ceding much of the authority they exercised over listed issuers, brokers, and dealers to federal regulators and non-market self-regulatory organizations (SROs). Addressing, in turn, the role of exchanges’ listing rules for the corporate governance of listed companies, the regulatory requirements pertaining to the provision of liquidity to market participants, as well as the legal and regulatory regime for the dissemination of market information, the chapter builds on the theoretical framework developed in the previous chapter and discusses the applicable provisions in US securities regulation.