Stock Exchange Alliances, Access Fees and Competition

Bank of Finland Working Paper No. 22/2001

42 Pages Posted: 30 Oct 2001

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Juha Tarkka

Bank of Finland - Research

Date Written: October 9, 2001

Abstract

This paper investigates the market consequences of alliance formation among stock exchanges. These alliances enable brokers to match investors internationally at their local market, thereby eliminating the need for brokers to maintain memberships in foreign stock exchanges. We sort out the conditions under which alliance formation increases profits for stock exchanges and brokers, and how changes in fee structures affect investors' participation rates and welfare. Finally, we examine several methods for implementing access fees and their welfare implications.

Keywords: stock exchange alliances, access fees, competition among stock exchanges

JEL Classification: G2

Suggested Citation

Shy, Oz and Tarkka, Juha, Stock Exchange Alliances, Access Fees and Competition (October 9, 2001). Bank of Finland Working Paper No. 22/2001. Available at SSRN: https://ssrn.com/abstract=288296 or http://dx.doi.org/10.2139/ssrn.288296

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

HOME PAGE: http://https://www.frbatlanta.org/research/economists/shy-oz.aspx

Juha Tarkka

Bank of Finland - Research ( email )

P.O. Box 160
FIN-00101 Helsinki
Finland
+358-9-1831 (Phone)

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