Modern transformations of american model of stock market

Abstract

The article investigates the motives and economic consequences of the reforms, which have been committed with stock markets in the US during the period of 1997- 2005.

The article’s goal isto specify possible consequences of reforming the stock markets’ institutional structure, through establishing links between features of the US stock market reforms and their results, concerning the incentives of market professionals and entrepreneurs access to capital.

The analysis of the literature which has grounded the negative impact of changes in the stock market on the access of small companies (with capitalization of 50 million dollars) to capital has been carried out. In particular, it has been proved that a significant reduction in the number of listed companies which has been observed in US stock markets for 15 years, reduction in number and aggregate value of IPOs,which are conducted by national issuers with relatively low cost of capital, can be considered a consequence of decimalization but not the result of cyclical fluctuations of business activity. Actually the destruction of dealer incentives by reducing the commission from 25 cents per share to 3,125 cents per share, ie 87,5% has become the mechanism of limiting access to liquidity for companies with a low cost of capital.

Institutional maintaining for saving economic incentives to trade with securities of new and small companies are specified. In particular, it is substantiated the importance of a balanced priorities system (targets) of the stock market in the process development of institutional structure of the securities market in Ukraine. Contrary to this, the subordination of the institutional structure of stock markets to the single criterion of reduction of transaction costs becomes a threat as for the restriction of an access to sources of capital replenishment for certain groups of companies. These groups primarily include new and innovative companies and firms that start listing with a minimum aggregate value of its capital. This fact should be taken into account in the process of improving the policy of state regulation of stock markets in Ukraine.

The results of the article may be useful for formulating objectives and priorities of state regulation of the Ukrainian stock market’s institutional structure and to determine the targets of organizations, engaged in self-regulation of Ukrainian stock markets.

In the future, special importance will acquire the research on the problems of monitoring the size of the fees and other sources of income of professional securities market participants. The study of size of fees and rate of return relevant to the particular stage of developing the national stock markets will be of great necessity.