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The SEC has proposed several rules and rule amendments that, if adopted, would impact market structure of the equities markets for years to come. This article summarizes those proposed changes and describes some of the early reaction to them by both industry and regulators. Regulation NMS, as the rule proposals are collectively called, is intended to accomplish three primary objectives: (1) to promote equal regulation of market centers, (2) to update antiquated rules, and (3) to promote greater order interaction and displayed depth. Regulation NMS, which is intended to “advance the dialogue” on market structure issues, consists of rule proposals in four substantive areas. First, the SEC has proposed a uniform trade‐through rule for all national market system (“NMS”) market centers that would affirm the principle of price priority while addressing the differences between automated and manual markets. Second, the SEC has proposed a uniform market access rule with a de minimis fee standard intended to assure non‐discriminatory access to the best prices displayed by NMS market centers without mandating hard linkages such as the Intermarket Trading System (“ITS”).

The purpose of this paper is to explain rule changes proposed by the Securities and Exchange Commission designed to address regulatory concerns related to “dark pools” of liquidity.

The paper explains the background and policy issues related to dark pools, discusses the SEC's amended definition of “bid” or “offer” under Regulation NMS to include “actionable indications of interest” (“actionable IOIs”), outlines a proposed reduction of the average daily trading volume threshold that triggers a public display of ATS orders from 5 percent to 0.25 percent, discusses a proposal to require an alternative trading system (“ATS”) to disclose its identity in real time on its reports of executed trades, and explains proposed size‐discovery exclusions to the changes detailed above.

The paper finds that the proposed rules represent the Commission's attempts to improve the NMS without inhibiting the use or continued technological development of trading strategies that are consistent with NMS goals.

The paper provides a clear explanation of complex market mechanisms and proposed rules by experienced financial institution and securities lawyers.

A friendly merger can be structured as a one‐step transaction or a two‐step transaction. For a variety of reasons, such as the fast speed with which two‐step mergers are completed, there are concerns about whether target shareholders are disadvantaged by this structure in comparison with one‐step mergers. The purpose of this paper is to examine the effects of the two types of merger structures from the shareholder point of view.

In order to compare the shareholder wealth effects of merger structure, the authors control for deal and firm characteristics and the endogenous nature of the choice of transaction form. Specifically, the authors follow the literature to use a switching regression framework with endogenous switching to address endogeneity.

No evidence was found of detrimental effects of two‐step mergers on target shareholders. The findings suggest that at least some one‐step mergers could benefit from using the two‐step structure. The authors provide several explanations for the continued use of one‐step mergers.

Although there is some literature on freeze outs of minority shareholders, no one has examined two‐step mergers in comparison with one‐step mergers. The paper's results will be valuable to corporate managers, M&A advisors, regulators, and policy makers.

The revision of the Investment Services Directive is one of the most significant proposals under the Financial Services Action Plan. Although not likely to be implemented until the end of 2006, it is hoped that many of the consequent changes to legislation and the FSA Rules will be in place before then, and it is, therefore, crucial to keep track of its progress through the Lamfalussy legislative process. This paper discusses the shape of the Commission’s final proposals, which were published in November, 2002, and how they will change the existing investment services regime in the UK.

Here you will find practical analysis of the rule and how it will work in the real world. It has a particular application to compliance officers who are charged with that responsibility to see to it that the rule is properly implemented and enforced. There is also some forward looking analysis of what problems or questions the new rule may bring.

The purpose of this paper is to investigate the state of integration of securities market infrastructure in Europe.

Given the lack of quantitative and price‐based measures, this paper adopts a rather qualitative approach to evaluating the degree and evolution of integration in the securities market infrastructure within Europe. Future challenges, policy options for regulation and market design are discussed.

Despite its single currency, the euro area securities infrastructure remains highly fragmented due to cross‐border differences in tax regimes, procedures, laws, and vested interests. Cost savings and increased efficiency can be expected from further integration.

This is the only paper which provides a comprehensive and comparative analysis of the current level of integration of the securities infrastructure in the euro area and its implications for regulation and market policy.

This case examines critical ethical accounting practice issues surrounding a request for proposal for audit services at Aviary Corporation based on a real Securities and Exchange Commission enforcement action. Audit and tax partners at Western Accounting Firm, a large international public accounting firm, used confidential information obtained from the company’s Chief Audit Officer to modify their proposal for audit services. In response to their actions, the Securities and Exchange Commission fined the auditing firm, the partners, and the Chief Audit Executive. The authors used publicly available information and adopted fictitious names to develop a teaching case that instructors can implement in a variety of accounting and ethics classes to increase students’ understanding of professional codes of conduct and independence guidance.

The purpose of this paper is to discuss the implications of a recent SEC settlement with Morgan Stanley & Co. (MS & Co.) with regard to: communication and coordination among legal, compliance, business, and technology departments when designing, implementing, and maintaining operating systems and compliance policies and procedures; and the SEC's view of best execution in the context of net trading and market making.

The paper describes the Settlement Order. Itdiscusses, in light of the Order, the need for firms to coordinate among departments when they implement new systems or make changes to new systems; and provides a legal and regulatory analysis of the basis for MS & Co.'s liability, including a brief history of regulations on best execution and riskless principal trading. It also offers principal lessons to be drawn.

The Settlement Order found that MS & Co. would at times execute with the Street at a better price than it provided to a customer. The SEC noted that MS &Co. violated its duty of best execution in violation of the 1934 Exchange Act but particularly emphasized that the practice was inconsistent with MS & Co.'s established internal policies and procedures and certain disclosures provided by the firm to third‐party broker‐dealers from which it received orders.

Broker‐dealers need to clearly define their processes for implementing new systems or changing existing systems, including approval requirements, responsible individuals, and periodic review procedures to ensure adherence to stated policies and procedures. Broker‐dealers need to disclose net trading practices or similar trading practices to other broker‐dealers that are routing orders to them. They should also review their net trading practices in light of Regulation NMS.

The paper provides practical guidance and review of regulations concerning net trading, riskless principal trading and best execution from experienced securities lawyers.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

The purpose of this paper is to assess the latest directives of the European Parliament and the Council – MiFID II and MiFIR – on markets in financial instruments in response to the growth of dark pools in European equity markets.

This paper examines the impact of the new regulatory packages on European equity markets by identifying areas where the legislation is effective and comparing these changes in EU legislation with US legislation on dark pools.

This paper find that the MiFID II and MiFIR directives, implemented by the European Securities and Markets Authority to address these concerns, have reduced information asymmetry between market participants, thereby increasing competition between regulated markets and alternative trading facilities.

Increased competition can improve market quality, which has practical implications for financial market regulation and policy formulation.

These findings are novel in the existing literature on high frequency trading through dark pools. They improve the understanding of dark trading and its impact on competition and market efficiency. In addition, this research can assist policymakers in designing effective financial market regulation. The economic analysis of legislation also helps regulators assess the impact of new legal provisions on the functioning of capital markets.