The changing landscape of the stock exchange industry
In advanced economies, stock exchanges were traditionally established as memberowned organisations or government institutions. Since the mid-1990s, however, most stock
exchanges have been transformed into privately owned for-profit corporations. Today, all
major stock exchange operators in advanced economies have their shares listed and traded
on their exchanges, while the mutual form based on brokers’ membership has almost
disappeared.
In emerging markets, stock exchanges were often established in the form of state-owned
corporations and their transformation into listed corporations has been more gradual.
While the stock exchanges in Brazil and Mexico are now listed companies, those in Turkey
and Saudi Arabia are still run as state-owned enterprises. Furthermore, the largest
emerging market stock exchanges, which are in the People’s Republic of China, operate as
semi-public institutions and are membership institutions directly governed by the China
Securities Regulatory Commission (CSRC).
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CHANGING BUSINESS MODELS OF STOCK EXCHANGES AND STOCK MARKET FRAGMENTATION
122 OECD BUSINESS AND FINANCE OUTLOOK 2016 © OECD 2016
During this transformation, there have been a large number of mergers and acquisitions
(M&A) in the stock exchange industry, involving companies from sectors such as electronic
trading platforms, financial information providers, financial index providers, data
management and asset management. Figure 4.1 shows the number of M&A transactions in
the stock exchange industry between 2000 and 2014. The figure covers a total of 169 buy-side
deals and mergers involving publicly listed stock exchange operators. In 26 of these
transactions, a stock exchange acquired an equity stake in another stock exchange or stock
exchange group. I
n 18 cases, the stock exchange acquired a 100% or majority stake and in
eight cases, a minority stake. There were an additional 19 transactions where stock
exchanges acquired an exchange that was trading securities and derivatives other than
stocks. After 2005, a significant number of buy-side deals, with respect to related businesses
such as information technology and post trade services, can be observed.
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