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Part I Introduction, 2 Looking for New Lenses: How Regulation Should Cope with the Financial Market Infrastructures Evolution »

Carmine Di Noia, Luca Filippa
From: Financial Market Infrastructures: Law and Regulation
Edited By: Jens-Hinrich Binder, Paolo Saguato
This chapter traces the evolution of financial market infrastructures (FMIs) mainly exchanges, central counterparties, and central securities depositories in the last 30 years. Technological innovation and the structural reforms that supported cross-border trade supported the global expansion of FMIs over the past decades. The FMIs landscape went through substantial changes not just in their business models but also in ownership structures. While exchanges, central counterparties, and central securities depositories, for a long time, used to be either public entities or mutual enterprises, they have since been transformed into for-profit companies, in many cases listed on stock exchanges. What used to be a monopolistic market structure has become a highly competitive, globalized market, where one provider's services easily can be substituted by alternatives in a large variety of marketplaces. In addition to providing indirect services to financial intermediaries, FMIs increasingly have come to offer and distribute services directly to wholesale and even retail investors, thereby reducing transaction costs and enhancing efficiency. All of this has a dramatic impact on regulation and supervision: the traditional micro-prudential and investor protection issues are now more and more intertwined with macro-stability and antitrust issues which may lead to some reshape in the institutional architecture, especially in the framework of Capital Markets Union in the European Union.