Stock and Derivatives Exchanges in the EU

This chapter examines securities and derivatives exchanges in the European Union. It begins with a theoretical analysis of the business models of exchanges, identifying three major economic functions, which are also reflected in existing European regulation: listing, trading, and data vending. The chapter then looks at the regulatory frameworks for algorithmic trading techniques, whereby regulated markets as well as market participants have been required to avoid disruptive market practices, subject to a detailed set of conduct-of-business and organizational requirements. Overall, this regime — also with regard to the applicable trading fees — can be characterized as rather restrictive. The chapter concludes by discussing the rather complex regulations for the sale of market data. The transactions-oriented regime for the operation of financial exchanges is backed up with a complex set of organizational requirements, regulating both the ownership structures of operators of exchanges and other aspects of corporate governance