Английский язык. Практический курс для решения бизнес-задач, Пусенкова Нина

Английский язык. Практический курс для решения бизнес-задач

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Пусенкова Нина

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Market Regulation. Every transaction made at the NYSE is under continuous surveillance during the trading day. The NYSE is the most active self-regulator in the securities industry. Regulations protect the integrity of the marketplace, member firms, and, most importantly, the customer.

StockWatch, a computer system that searches for unusual trading patterns, alerts NYSE regulators to possible insider trading abuses or other prohibited trading practices. NYSE’s other regulatory activities include the supervision of member firms to enforce compliance with financial and operational requirements, periodic checks on broker’s sales practices, and the continuous monitoring of specialist operations.

NASDAQ (an Electronic Exchange)

The NASDAQ is sometimes called

«screen-based» because buyers and sellers are connected only by computers over a telecommunications network. Market makers, also known as dealers, carry their own inventory of stock. They stand ready to buy and sell NASDAQ stocks, and they are required to post their bid and ask prices. Although the NYSE has a far greater total market capitalization, NASDAQ has surpassed the NYSE in the number of both listed companies and shares traded.

NASDAQ has listing and governance requirements that are similar but slightly less stringent than those of the NYSE. For example, a stock must maintain a price of $1 and the value of the public float must be at least $1.1 million. If a company does not maintain these requirements, it can be delisted to one of the OTC markets.

NASDAQ Small Cap

NASDAQ has a separate «tier» for small capitalization companies; the average market cap of the 685 companies listed in this tier at the end of 2003 was about $60. This is an excellent exchange for investors interested in smaller companies because the NASDAQ Small Cap also has listing and governance requirements.

Electronic Communication Networks (ECNs)

ECNs are part of a class of exchange called alternative trading systems (ATS). ECNs trade NASDAQ-listed stocks, but they connect buyers and sellers directly. Because they allow for direct connection, ECNs bypass the market makers. You can think of them as an alternative means to trade stocks listed on the NASDAQ and, increasingly, other exchanges as well (such as the NYSE or foreign exchanges).

There are several innovative and entrepreneurial ECNs, and they are generally good for customers because they pose a competitive threat to traditional exchanges, and therefore push down transaction costs. Currently, ECNs do not really serve individual investors; they are mostly of interest to institutional investors.

Over-the-Counter (OTC)

OTC refers to markets other than the organized exchanges described above. OTC markets generally list small companies, and often these companies have «fallen off» to the OTC market because they were de-listed from NASDAQ. Some individual investors will not even consider buying OTC stocks due to the extra risks involved. On the other hand, some strong companies trade on the OTC. In fact, several strong companies have deliberately switched to OTC markets to avoid the administrative burden and costly fees that accompany regulatory laws such as the Sarbanes-Oxley Act.

There are two OTC markets:

Over-the-Counter Bulletin Board (OTCBB) is an electronic community of market makers. Companies that fall off the NASDAQ often end up here. On the OTCBB, there are no

«quantitative minimums» (no minimum annual sales or assets required to list).

Companies that list on the pink sheets (i.e. less than 300 shareholders) are not required to register with the SEC. Liquidity is often minimal. Also, keep in mind that these companies are not required to submit quarterly 10Qs.

Source: Investopedia, September 24, 2004, David Harper, Contributing Editor

Essential Vocabulary

1.public stock – акция публичной компании

2. New York Stock Exchange (NYSE) – Нью-Йоркская фондовая биржа

3. American Stock Exchange (AMEX) – Американская фондовая биржа

4. primary market – первичный рынок

5. float n – чеки в процессе инкассации; число акций корпорации, выпущенных на рынок; банкноты и монеты в кассе

float (a company) v – организовать новую компанию и выпустить ее акции на рынок

6. a.k.a. (also known as) – также известный как

7. secondary market – вторичный рынок

8. brokerage account – брокерский счет

9. trading floor – торговый зал