Who Benefits from Broker ID Disclosure?

67 Pages Posted: 30 Jul 2018

See all articles by Juliane Krug

Juliane Krug

University of New South Wales

Peter L. Swan

University of New South Wales (UNSW Sydney; Financial Research Network (FIRN)

P. Joakim Westerholm

University of Sydney Business School

Date Written: July 29, 2018


Unlike virtually all market microstructure research that is, of necessity, restricted to actual trades, we analyse the underlying orders prior to their disguise in the form of trades to examine trading cost implications for institutional investors and households separately. We investigate three unique policy changes conducted on Finnish NASDAQ OMX Helsinki stock market in March 2006, June 2008 and April 2009. We find for all participants that transaction costs substantially improve with an enhanced level of information disclosure. The reintroduction of ex post broker identities improved transaction costs by over 3.7 bps per order. Overall market volume declined by 12% (trade count, 30%) when ex ante broker identities were removed in the first event and by a further 8% (trade count, 18%) in the second when ex post identities were removed.

Keywords: Market quality, market efficiency, liquidity, transparency, broker IDs, trades, orders, individual investors, institutional investors

JEL Classification: G12 G14 G18 K22

Suggested Citation

Krug, Juliane and Swan, Peter Lawrence and Westerholm, P. Joakim, Who Benefits from Broker ID Disclosure? (July 29, 2018). 31st Australasian Finance and Banking Conference 2018, Available at SSRN: https://ssrn.com/abstract=3222019 or http://dx.doi.org/10.2139/ssrn.3222019

Juliane Krug (Contact Author)

University of New South Wales ( email )


Peter Lawrence Swan

University of New South Wales (UNSW Sydney ( email )

School of Banking and Finance
UNSW Business School
Sydney NSW, NSW 2052
+61 2 9385 5871 (Phone)
+61 2 9385 6347 (Fax)

HOME PAGE: http://https://www.business.unsw.edu.au/our-people/peterswan

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane

HOME PAGE: http://www.firn.org.au

P. Joakim Westerholm

University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006

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