Now that computers have eliminated the require for stock trading floors like the Gigantic Board’s, the balance of power in equity markets is shifting. By bringing more orders in-house, where clients can move gigantic blocks of stock anonymously, brokers pay the exchanges less in fees and capture a bigger share of the $11 billion a year that stock institutional investors pay in trading commissions as well as the surplus of the century had taken place.
Group Inc. and Credit Suisse Group, already steer 12 percent of U.S. security trades away from the exchanges to their internal systems. That share probably will stock increase to 18 percent by 2010 as more investment banks bypass the NYSE and NASDAQ and pair buyers and sellers of securities themselves, according to information compiled by Boston-based Aite Group LLC, a brokerage-industry consultant.
However, corporate governance at least in
Market participants
A few decades ago, worldwide, buyers and sellers were individual investors, such as wealthy businessmen, with long relatives histories (and emotional ties) to particular corporations. Over time, markets have stock become more “institutionalized”; buyers and sellers are largely institutions (e.g., pension money, insurance companies, mutual money, index money, exchange-traded money, hedge money, investor groups, banks and various other financial institutions). The rise of the institutional investor has brought with it some improvements in market operations. Thus, the government was responsible for “fixed” (and exorbitant) fees being markedly reduced for the ‘small’ investor, but only after the gigantic institutions had managed to break the brokers’ stock solid front on fees. (They then went to ‘negotiated’ fees, but only for gigantic institutions.
Stock
