Global Market Surveillance

Abstract

This paper provides evidence on market surveillance from stock exchanges and securities commissions from 25 jurisdictions in North, Central and South America, Western and Eastern Europe, Africa and Asia. Stock exchanges as SROs engage in a greater range of single-market surveillance of market manipulation than securities commissions, but the scope of cross-market surveillance activity is very similar among stock exchanges and securities commissions. Crossmarket surveillance is more effective with information sharing arrangements, and securities commissions are more likely to engage in information sharing than stock exchanges. The scope of cross-market surveillance is highly positively correlated with trading activity, unlike the scope of single-market surveillance. The data also indicate that as at 2005, there is ample scope for jurisdictions to expand their cross-market surveillance and thereby stimulate investor confidence and trading activity.

Law, finance, and the international mobility of corporate governance

“…The data do not support this bootstrapping effect (Coffee, 2002), and there is still a large effect of local national governance on firm value amongst firms that do cross-list (Cumming, Hou, & Wu, 2017). International adoption of other jurisdictions' monitoring technology (Cumming & Johan, 2008) and regulations (Cumming, Johan, & Li, 2011) can enable the international transfer of governance and superior stock market outcomes such as new listings and liquidity. Regulators adopt from other jurisdictions monitoring technology (Cumming & Johan, 2008) and regulations (Cumming et al, 2011) that enable superior governance and stock market outcomes.…”

Information systems, agency problems, and fraud

“…The main findings are largely paraphrased and/or copied from the abstracts of the papers in order to most succinctly represent the authors' contributions. However, they do not exhaustively represent all the findings from the papers that shows the importance of governance in other industries and other countries at a firm level (Agrawal and Cooper 2015;Atanasov et al 2015;Bernile et al 2015;Haß et al 2015;Karpoff et al 2008aKarpoff et al , 2008bZhou and Reesor 2015), an intermediary level (Chircop et al 2017;Cumming et al 2013;Vismara et al 2015), and a country level with respect to securities industry computer surveillance (Cumming and Johan 2008), and enforcement (Aitken et al 2015;Cumming et al 2011Cumming et al , 2017; see also Cumming et al 2015, for an overview of the related literature). Overall, the evidence in this special section on Information Systems Frontiers points to the growing importance of the intersection between information systems and fraud.…”

Exchange trading rules, governance, and trading location of cross-listed stocks

“…We examine several sets of regulation, exchange rule, and governance variables. (Cumming and Johan, 2008;Cumming, Johan and Li, 2011 (Erb et al, 1996;Gradstein, 2007;Boubakri et al, 2008). A higher score indicates a less risky country.…”

“…First, the paper is related to prior work showing the importance of regulation to economic development (for example La Porta et al, 1997Porta et al, , 1998. Second, the paper is related to other literature showing the importance of stock exchange rules for market integrity (Cumming and Johan, 2008) and liquidity (Cumming et al, 2011). Third, this paper tangentially relates to the bonding literature.…”

“…Stock exchanges invest considerable resources and money on technology, regulation and manpower to promote market efficiency and integrity 1 . Exchanges that are based in jurisdictions with superior regulation and surveillance enjoy the benefit of more active trading (Cumming and Johan, 2008;Cumming, Johan and Li, 2011). For firms resident in jurisdictions that have inferior regulation or enforcement, there is a benefit to cross-listing in the U.S. to spur on trading activity (Halling et al, 2008;Gagnon and Karolyi, 2009).…”