Untitled2_37 - Chapter 2 Introduction to financial systems...

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the NYSE is an explicitly hybrid market. Each stock is assigned a single market-maker, known as a specialist. He must ensure that trade in the stock in question occurs in a fair and orderly fashion. He must provide quotes to everybody. However, the public can also submit limit orders to the specialist. The specialist then maintains (and has exclusive access to) the limit order book. When the specialist provides quotes to potential customers, they may be his own or (partially) composed from public limit orders. This implies that not all trades affect the specialist’s inventory. Secondary markets around the world In the United Kingdom , secondary financial markets are as sophisticated as in the USA. The London Stock Exchange , the major organised stock market in the UK, enables domestic and overseas companies to raise equity capital. (Note that in August 2007 the London Stock Exchange merged with Borsa Italiana, and nowadays the group leads the European equities business.) For frequently traded stocks (constituents of the FTSE-100, the
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