Changing Paradigms in Stock Exchanges’ Governance

There is a bourgeoning strand of academic literature dealing with the matter of corporate governance in the exchange industry. Large part of that literature investigates the reasons why exchanges modify their legal status. In particular, it tries to find a viable economic explanation to the demutualization of exchanges and the subsequent listing of major exchanges. The corporatization of exchanges would mirror the attempt to balance the vested interests of brokerage firms and outside shareholders, locals and international intermediaries, listed firms and platform users. The exchange industry has been rapidly evolving, especially during the last decade. Alongside with increasing consolidation, the exchange industry is experiencing a particular path of development moving toward a deepening of links between platforms. Such a development is a by-product of institutionalization of ownership and links platforms at an ownership level. What we are seeing are few large institutional investors holding large stakes in major exchanges exerting, the facto, a joint influence in the biggest players. We may call it as a form of soft consolidation or clustering. It becomes, therefore, interesting to delve into the implications and criticalities connected to the growing up of clusters of exchanges.