|Budget Amount *help
¥3,300,000 (Direct Cost : ¥3,300,000)
Fiscal Year 2000 : ¥600,000 (Direct Cost : ¥600,000)
Fiscal Year 1999 : ¥1,300,000 (Direct Cost : ¥1,300,000)
Fiscal Year 1998 : ¥1,400,000 (Direct Cost : ¥1,400,000)
After the demolition of obligatory trades at the designated exchanges in December 1998, traders became to use other places for securities trading than the floor at the Tokyo Stock Exchange, such as off-the-hour trades at the TSE and off-the-exchange trades. This is primarily because of the regulatory change that made it possible to provide alternative places to trade, but it is evidence that many agents started to search the way to utilize this opportunity. A competition for trading places began. I summarized welfare implications of this movement in "Competition among exchanges as a place for trade and its welfare implications, " in Investment 2000.
The TSE is a purely order-driven market, where the only source of the liquidity is the limit orders on the book. When a trader chooses a type of orders, either market or limit, she compares price gain the limit order provides with a possibility that it might not be executed within a day. With preliminary tick-by-tick data of December 1998, I estimated the execution probabilities of limit orders, and reported the results in a discussion paper, "Execution Probabilities of Limit Orders."
Most of traded financial securities are those issued by corporations. Holders are entitled to have some rights to control the firm, as well as some claims in cash flows of it. It is a concern of market participants what kind of securities corporate managers decide to circulate publicly, and what kinds of services financial intermediaries provide. I review these points in the fifth chapter "Corporate Governance" of the book, Advances in Financial Analysis 2000, and in an article "Recent Development of Theories of Firms, " published in Gendai Fainansu 1999. These are necessary ingredients to study how a trading place is supplied, because this determines the characteristics of the securities traded.