Electronic Exchanges

6. From National to Global Competition

Executive Summary

There was a time when there were 250 stock exchanges in the United States and not too long ago when there were 23 in India. Competition in those days was, at best, local. Improved communications and falling communications costs brought competition to the national level, and the number of stock exchanges fell dramatically in most multi-exchange countries. Recently, with the shift to screens and the need to build volume to lower per-trade costs, exchanges have begun competing on a global level. This competition has been most successful when the attacker is electronic and the target still floor based—a diminishing opportunity.

Before we explore the shift from national to global competition, we ...