Download This PaperExchange Trading Rules and Stock Market Liquidity
41 Pages Posted: 2 Feb 2010 Last revised: 2 Mar 2010
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Exchange Trading Rules and Stock Market Liquidity
Exchange Trading Rules and Stock Market Liquidity
Date Written: February 1, 2010
Abstract
In this article, we examine stock exchange trading rules for market manipulation, insider trading, and broker-agency conflict, across countries and over time, in 42 stock exchanges around the world. Some stock exchanges have extremely detailed rules that explicitly prohibit specific manipulative practices, but others use less precise and broadly framed rules. We create new indices for market manipulation, insider trading, and broker-agency conflict based on the specific provisions in the trading rules of each stock exchange. We show that differences in exchange trading rules, over time and across markets, significantly affect liquidity.
Keywords: Market Manipulation, Liquidity, Insider Trading, Broker-Agency Conflict, Law and Finance
JEL Classification: G12, G14, G18, K22
Suggested Citation: Suggested Citation
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
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