[This message was posted by Mahesh Kumaraguru of <[email protected]> to the "US Regulations" discussion forum at http://fixprotocol.org/discuss/48. You can reply to it on-line at http://fixprotocol.org/discuss/read/033d8053 - PLEASE DO NOT REPLY BY MAIL.]
Thanks John. Sorry for the late reply, busy relocating. In your post http://fixprotocol.org/discuss/read/4db013c4 you mentioned "I can start a new national securities exchange in the United States today for the cost of my legal fees, staffing, and technology. A reasonably-focused business plan could be put into effect by an entrepreneur for less than $5 million, allowing several years of reserves for sufficient order flow to develop." So the government has not exactly prohibited opening a new stock exchange, but placed some regulations. I would like to understand more of what are the regulations and what needs to be done after getting venture capital funding of U$D 5 million+ money to actually start a stock exchange. To this same question posted in the International form, Jan Jonsson replied "... trading is actually simple, clearing and settlement is harder. Securities has to be hold somewhere, exchanged for money in a safe way (so you don't end up with a one legged trade, losing shares for no money, or pay for something that you never gets). ..." at http://fixprotocol.org/discuss/read/cea412de . So how does the regulations (within the context of US markets) prevent the situation that Jan describes. At http://en.wikipedia.org/wiki/Block_trade it is stated "Block trade is a permissible, noncompetitive, privately negotiated transaction either at or exceeding an exchange determined minimum threshold quantity of shares, which is executed apart and away from the open outcry or electronic markets." So could not classifieds be used to negotiate block trades? Sounds silly, but thats what I am trying to understand. Regards, K. Mahesh > Mahesh, > > Government regulation is anti-competitive in purpose and design. Restraining > competition to protect the market positions of incumbents is the entire point > of the exercise. The leaders of every new industry will eventually clamor > for regulation to raise barriers to entry and socialize the cost of consumer > search. Of course regulation isn't sold that way - if its supporters told > the truth, regulation would have no political support. > > If people could trade securities directly, they wouldn't need brokers. The > U.S. securities markets are so rigged in favor of incumbents that it is > illegal for ordinary folks to form a securities exchange. Only > broker-dealers and persons associated with broker-dealers enjoy that > privilege. > > Best, > John > > > Hi John, > > > > Continued from http://fixprotocol.org/discuss/read/84880800 > > > > I would like to understand why US government forbids trading stocks on > > classifieds. > > > > Regards, > > K. Mahesh [You can unsubscribe from this discussion group by sending a message to mailto:[email protected]] -- You received this message because you are subscribed to the Google Groups "Financial Information eXchange" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/fix-protocol?hl=en.
