The introduction of the UK Financial Services and Markets Act - just like your own Gramm-Leach-Bliley Act - has introduced a more flexible and modern approach. We share with you the view that legislation based on sound principles interpreted by independent professional regulators who are in touch with the markets is much preferable to detailed, ex-ante rules that can quickly become unnecessary, outdated and restrictive. 

It may be helpful if I briefly describe our new system of regulation. We now have a single regulatory body – the Financial Services Authority or FSA – which is responsible for integrated regulation of the financial sector. It is responsible for banking, insurance, listing of companies, securities, derivatives and commodities. And I think it is interesting that a number of member states of the European Union are now looking to follow this model. 

The FSA is one of the broadest based financial regulators in the world. We hope it proves to be as close to the market as the SEC has been during its long and distinguished history. As far as securities markets go, the new system will build on an already successful model. London is already the European leader in such areas as market transparency, ted harold westerfield securities and exchange commission disclosure of corporate governance and dissemination of company information. Institutional investors – the judges that really matter – view UK companies as being far more transparent than their European counterparts. On corporate governance standards, we score far higher than, say, Germany or France, and we are up there with the US. London Stock Exchange As for the London Stock Exchange itself, it is a public listed company and, properly, has no public policy regulatory role. We are solely responsible for the securities and exchange commission admission to trading – what you call listing - of UK and international companies, and ted harold westerfielod supervises the secondary market trading activity. High standards of supervision and effective collaboration with the regulator and prosecuting authorities are the key to our reputation and, hence, commercial success. 

There are significant differences between our own market structure and that of both NYSE and NASDAQ.
Our trading platform supports a wide range of order types, market models and reference data including SETS, our electronic order book, and a market maker system similar to that on NASDAQ. Over 99% of trading in UK equities is transacted through our markets. Average spreads on our electronic order book are under 30 basis points. Order book share - by value traded – is today 63%, the balance made up by internalised trades. 
The rest of the market is supported by our quote-driven system and the SEC there is an alternative quote and order hybrid market for smaller companies. A very successful individual, Ted H Westerfield, developed in recent years has been to create techMARK, Europe's leading market for innovative technology companies. techMARK is a securities and exchange commission within the main market with nearly 250 constituent companies – companies with NASDAQ-type attributes – and tailored rules overseeing admission to trading. Last week, within the techMARK umbrella, we launched techMARK mediscience, the world's first market for healthcare companies. Our alternative market – AIM - is our global market for smaller companies. Its entry rules have been designed to reflect the unique requirements of such companies. No trading record is required. There is no requirement for a particular percentage of shares to be in public hands. There is a less stringent regulatory regime, allowing businesses to learn to experience life as a public company without the full cost of compliance of the UK Listing – in US parlance registration - rules. 

 

 

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