Foreign Trading Screens in the United States

Abstract

Remote trading screens allow investors to trade on an exchange without being physically present at the exchange. Europeans have repeatedly urged the United States to facilitate the placement of such screens from European exchanges on American soil. The U.S. Securities and Exchange Commission, however, has objected to the placement of those terminals unless the foreign marketplace registers as a national securities exchange under U.S. law. This article argues that technological advances in the securities industry have largely mooted the controversy. Current requirements neither protect U.S. investors as much as the SEC claims nor inhibit competition as much as the European side asserts.

Keywords: stock exchange, trading screen, securities trading, internationalization, state intervention, protectionism, legal harmonization

JEL Classification: F30, F50, G15, G18, G24, G28, K22