Differences and Similarities of Regulated Markets and Multilateral Trading Facilities.
Differences and Similarities of Regulated Markets and Multilateral Trading Facilities: Capital markets are some of the most significant areas of every financial market. So much so that the size of a country’s capital market can be viewed to be proportionate to its economy’s size.
This is because capital markets channel savings and investment by electronically connecting the suppliers of a nation’s capital such as investors (retail and institutional) with users of the capital who are capable of maximizing on the capital generated such as the government, businesses and corporations and certain individuals.
Capital is a crucial factor in the generation of economic output and therefore capital markets are very important for the proper functioning of an economy.
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the rules and regulations that govern them are also quite similar. For instance, players in both regulated and MTF markets can be granted access to players in the other market when necessary. The Directive 2004/39/EC provides:
Capital markets are large and deep, comprising of many participants from individuals to large corporations and the government. Since they deal with financial instruments such as stocks. And bonds for the mid and long term utilization, they have to be controlled and regulated.
This avoids any under dealings, monopoly and unfair competition. Since capital markets are a country’s economic backbone, foul play must be averted at all cost. This is where rules and regulations such as the Directive 2004/39/EC come in.
Fabozzi, F. J, Modigliani, F. (2002). Capital Markets: Institutions and Instruments. Upper Saddle River, New Jersey. Prentice Hall.
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