GoingGlobal 187the pace of which races on despite the presence of a dozen or more
unintegrated exchanges on the continent.
The U.S. National Association of Securities Dealers (NASD)
launched its own Nasdaq Europe stoc kmar ket, one that will have
strong links to the emerging continental hybrids. This signifies a
major step toward creating a 24-hour-a-day global stoc kmar ket that
began with the NASD’s similar venture in creating Nasdaq Japan, a
joint effort with the Softban kCorporation of Japan that is lin ked to
the Osaka Securities Exchange. All this will compel the convergence
of these markets in awesome ways, impacting finance, accounting,
disclosure, takeovers, governance, and ultimately what investors ex-
pect and what managers deliver.
Evidence of integration is pervasive in securities listing and trad-
ing. Foreign firms for years have pushed for global listing, most fa-
mously achieved by Daimler-Benz’s listing on the NYSE beginning
in 1993. These crusades continue, with rising success. After the re-
peal of Glass-Steagall, the Swiss ban kUBS filed with the SEC to
see kan NYSE listing, chiefly to give it a U.S.-listed stoc kto pay for
new acquisitions of U.S. financial services firms. This started with
its acquisition, a couple of months later, of PaineWebber.
SAP, a 25-year-old German software firm, was listed on the
NYSE in early August 1998, ten years to the day after its initial public
offering on the Frankfurt stock exchange. SAP is famous for gen-
erating “U.S.-style growth” and “U.S.-style rewards.” SAP executives
characterized its listing on the NYSE as evidence that SAP had “out-
grown” the Frankfurt stock market and evolved into a transnational
company combining features of a variety of governance models.
Clear-cut signs of the conglomeration of international securities
trading include the creation of the International Securities Exchange
(ISE) for options trading. An on-line brokerage firm, E*Trade, and
a group of broker-dealers led by Adirondack Trading Partners in-
vested nearly $80 million to establish this all-electronic options
exchange. The founders touted their ability to slash transaction costs
while simultaneously conducting staggering sums of electronic
trades which transcend geographic boundaries.
Investors should not ignore the shape of capital markets. How
trades are made, by whom, at what cost, and over what time periods
significantly affect price volatility and have an impact on market
efficiency. Equally important, exchange rules often dictate account-
ing requirements, and so the ease of international listings can impair
the integrity of financial reporting.