Aim of the project

I always had an interest and curiosity to know and understand the recent trends of global stock
exchanges. Also, the topic is very relevant to my course, MBA (International Business) and
highlights one of the most important international business issues. I also believe that the topic is
very intense and interesting in it, and will become more challenging with the progress of
research. Apart from gaining a thorough knowledge of the global stock exchanges, my aim of
researching this topic is to obtain good grades in this subject. The present piece of work is just a
framework of my final dissertation and a huge amount of research and introduction of many
theories and concepts is still going to be done later. This dissertation proposal may not be a very
satisfying piece of work as due to the lack of time I was unable to include everything, but I can
assure the reader that my final piece of work, my dissertation will going to very good. In this
proposal I have mainly presented my ideas as how I have thought of conducting this research.

Objective of the project
Stock exchanges were earlier regarded as public entities but now they are considered as
organisations from where traders can maximise their profits. This is due to the reason of growing
competition and integration among the global stock markets. Similar to the multinational
companies, in order to grow big and to have an edge above the other competitors, the global
stock markets also merge with each other. The object of researching this topic is to analyse the
effects of merger activities of the global stock exchanges and the growing competition between
them. I will also try to shed some light on the impact of globalization on the stock markets. The
work will also explore the strategies used by these stock exchanges to show their
competitiveness. Also, I will be doing a case study of the merger between London and Frankfurt
stock exchange. I will try to remain strict with my topic but while doing the research if I feel that
a slight modification can enhance the topic area, I might go with that.

Stock Exchange
Before starting with the proposal plan, let us understand what does the term stock exchange
actually means? According to Carmine Di , the stock exchange can be viewed as three ways:
The stock exchange as a broker dealer, the stock exchange as a firm, and the stock exchange as a
market. A stock exchange is an institution or corporation which hosts a market that provides
facilities for trading stocks, bonds and other securities to the traders and stock brokers. The
traders, sellers and buyers use to come here during the specific hours of the business days to do
their trading. The stock market also facilitates the capital events such as payments of dividends
and income. There are certain rules that are imposed on the trading companies and the traders
involved in these. Any company that is being traded on the stock exchange is referred as listed.

Globalization of stock markets
There has been an increase in the integration of the financial markets globally and the global
stock exchange is moving very rapidly towards globalization with the increasing number of cross
border transactions. There impact of globalization is still not very clear as there are both
advantages and disadvantages of this phenomenon. In one of the ways, the impact of
globalization has impacted with enhancing the national economies but on the other hand there is
an increase in trading instability and price volatility. Whatever may be the outcome, the reason
behind globalization is to grow big and increase competitiveness.
The most significant development that has occurred in the last decade is the globalization of the
world stock exchanges. According to Dr Sabri, he major factors responsible for this are,
Remote access for trading the securities,
Liberalization trends and ease of restrictions imposed on foreign ownership,
Technological advancements,
Emergence of new financial institutions,
Movement towards regional integration of stock exchanges
Experts believe that the phenomenon of globalization may be blessing as it lowers the risk due to
diversification, use of arbitrage in a relevant manner and improvement of market efficiency. But
also, due to the high level of correlation between different stock exchanges, the globalization
may result in price volatility and instable trading.

Examples of competition of the stock exchanges
According to Steil (1996, b) there was an era when exchanges were natural monopolies, but
the structure of the global stock exchanges have changed dramatically during the last decade.
Especially in USA, the examples of competition are not new. In 1885 the consolidated stock
exchange decided to trade the NYSE listed stocks, charging lower commission due to its lower
costs because it used the NYSE quotes and did not incur the cost of establishing the pre
discovery mechanism (Mulherin et al., 1991). Later, the London Stock Exchange reformed in
1986 and decided to trade the most important European stock, on its international segment
(SEAQ international). The European securities had to update their market because after the
reformation, the London Stock Exchange gained a significant share of market. There were some
of the examples of the competition among the global stock exchanges.

Methodology
For doing an intensive research, there are many research methods and strategies available in
order to conduct the piece of work. Selecting a research method is a very crucial step that decides
the quality of the proposed research. Selection of a proper research method helps in getting the
project done in a systematic manner with proper conclusions, thus enhancing thus quality of the
work. On the other if the research method is improper, that it might result in an unsystematic
report with a decreased quality of work. Now, over here, the topic itself is very broad and
intense, so in order to deduce results and arrive at a particular conclusion; I will be doing the
research by using both qualitative and quantitative research methods.

I will be using the following approaches,
Case Studies: I will be doing an in depth strategic analysis of the London Stock
exchange. This will help me to analyse the internal and the external environment of this
stock exchange. Also, it will help me evaluating the strategies of London Stock Exchange
towards the increasing global competition.
In-depth interviews: I will be interviewing some of the major stock brokers, financial
experts and traders of the London Stock Exchange in order know their views and
comments on this topic. This will help me in the conclusion part of the research. It might
be a difficult job for me to have an appointment and interviewing them, but I will try to
find out some way in order to get it them.
Focus groups: For this, I have mainly thought of doing the interviews with three focus
groups, the group of investors, the stock brokers, the sellers.


Data collection
The major portion of my data will be coming from the existing sources like journals on finance
and economics that concerns with issues of global stock exchange competition, mergers and
integration. This portion of data will be the secondary source of data. The sources of secondary
data will be the journals, articles, literature, books and internet. The secondary data will give a
foundation to my project because on the basis of the theories and the business models
summarized from the secondary source will develop a concept upon which I can process my
research. Since this will be a major project, I will try to emphasise more on the journal articles
and try to research not less than 25-30 journals. My secondary emphasis will be on books and at
last I will be extracting articles from internet.

The secondary data will help to analyse the topic, developing a conceptual background, the
interviews of the major stock brokers, financial experts and traders of London Stock Exchange
will act as the primary set of data. The importance of primary data will be that, it will help me to
arrive at a conclusion. I have chosen to interview these experts because they will give their views
and comments on the basis of their practical experience, since due to the intensity of the topic, it
definitely requires a mature and experienced views. Though the major portion of the ideological
views I will be getting from my secondary data, the journals articles written by leading
economists and researchers. During the collection of the primary data, there is a possibility that I
might not get enough time to have a conversation with the traders or stock brokers. In that case, I
might just ask them to fill up a small questionnaire. I will try to get the

Data analysis
After I am done with the theoretical aspects of the global stock exchanges, their competitiveness,
their merger activities etc., i.e., after I am done with my secondary data, I will try to
conceptualize the important points into some kinds of small models. The reason as why I will be
conceptualizing them into small models is that, as I will be reading articles written by different
economists and researchers of different period, there is a sure possibility of getting different
views and ideas. Since the sources will be more, it will be difficult to conclude each and every
view. Conceptualizing them into groups or models might make the project systematic and easily
understandable. It will also help me arrive at a proper conclusion.
After this, I will start the case study of London Stock Exchange. During this case study, when it
will come its analysis part, I will try to implement the models that I will try to conceptualize
using the secondary data, on the analysis part of the case study of the London Stock Exchange. If
I can, I might include an additional case study of another stock exchange. Analysing it with the
same models will help me infer an unbiased conclusion. So, if I had to do a case study of
another stock exchange, I will go with either an Asia stock exchange or an American stock
exchange.
When it will come to the analysis of the primary data, i.e., the interviews, the first thing Ill
going to make sure that there will be Ill try to have a personal conversational face to face
interview instead of questionnaires. By doing this I will be able to read their body language and
facial expressions. This might help me to deduce better inferences.

Time scale and plan
I have planned to give 3 months to this research. In whole three months, I will try to finish my
project. My planning is as follows,
I will start with building up the theoretical background and concepts. For this I have
planned to give it around one and half months. During this time Ill try to go through as
much as articles and journals I can. Within this time, I will make a rough conclusion on
the basis of theoretical aspects of this topic. I actually want to be theoretically sound as
much as I can before going for the interviews of the experts, in order to make sure to take
the full advantage of the interview utilizing my developed theoretical knowledge.
For the next 1 month I will be conducting the interviews.
And for the last 15 days I will be drawing the conclusion and revising my work.









How the Stock Market Works
Why Do Companies Issue Stock?
Companies throughout the world issue new stock shares every day. But what is stock, and why
does a company issue it. Businesses issue stock to raise capital.
Advantages of issuing stock:
1. A Company can raise more capital than it could borrow.
2. A Company does not have to make periodic interest payments to creditors.
3. A Company does not have to make principal payments.

Advantages for Stockholders
As part owner of a corporation, you may be entitled to share in the profits of the company. There
is also a chance that the company will grow and the price of the stock may rise.
If the company achieves economic success, the stock value will go up and stockholders will
benefit. For example, if you invested $1,000 to buy 100 shares of a company at $10 each and the
shares rose to $13 each you would gain $300. This is equivalent to a 30% return. In cases like
this, both the stockholders and the business would be pleased.
Initial Public Offerings (IPOs)
The very first sale of stocks to the public is called an initial public offering (IPO), and occurs on
the primary market. This tutorial will cover the following factors involved in initial public
offerings:
The Process of Issuing Securities
The Basics of Underwriting
Types of Underwriting Arrangements
The Prospectus
Ways a Stock May Be Advertised Before it is Sold
Newly Issued Stocks: Getting the Names Straight

The Process of Issuing Securities
Corporations sell stock to the public as one way to raise capital. Before it can issue new stock, a
corporation must first file registration statements with the Securities and Exchange Commission
(SEC) www.sec.gov. A twenty-day wait is required before it can sell the stocks.
The issuing company may make their registration statement public with a preliminary prospectus
called a red herring that summarizes the registration statement. Basic information about the new
offering is also provided, including how many shares are being offered and which brokerage
companies will distribute the stock to the public. At the time of issue, a final prospectus is
presented. This includes the price of the stock (its offering price).

The Prospectus
Prospectuses are legal documents that explain the financial facts important to an offering. They
must precede or accompany the sale of a primary offering. The law requires companies selling
primary offerings to send prospectuses to anyone who wants to buy a primary offering.
Prospectuses may also be used to solicit orders. Customers should read a prospectus carefully
before purchasing any primary offering.
Prospectuses include but are not limited to the following:
Offering price
Legal opinions about the issue
Underwriting method
The history of the company
Other costs related to investing in the stock
The management team
The handling of proceeds

The prospectus must be provided to customers before they complete any transactions. It must
also include the SEC's disclaimers that it does not approve or disapprove of the stock being
offered, and that it does not judge the prospectus' statements for accuracy.
Stock Market Players
As an investor, you need to be familiar with the different players in the investment arena and
how they buy and sell securities. Broker-dealers, registered representatives and the others have
specific roles in clearing the way for commerce in securities.

The Life of a Trade
The life of a trade can vary a great deal depending on whether the trade involves a listed, Nasdaq
or over-the-counter bulletin board security. The following description is intended to give you a
general idea of how the process of trading stocks works.
Trading is based on supply and demand. When you buy or sell a stock, you are literally trading
with another investor someone in your city, across the country or on the other side of the
world. An order from you to buy a stock must be matched with a seller's order to sell. If you
place an order on the Nasdaq, or one of the many other exchanges, this match may be done
electronically.
If your order is sent to the trading room floor of one of the exchanges, the auction process
begins. A member of the stock exchange walks to the appropriate trading area where your stock
is traded and presents your order. Sometimes there will be a broker in the crowd with a sell order
at the same price. In this case your order will be completed or filled. Brokers must often act
quickly or risk missing the market. If a broker hesitates, a competitive bid could be placed,
driving up the market price for the next trade.
The broker may also hand your order to a specialist. The specialist is a person in each trading
area, whose job is to guarantee a fair and orderly market by matching buys and sells or by buying
or selling themselves if needed. When an order is away from the market, it can be placed under a
specialist's care. From this point on the specialist is in charge of representing your order.
If you placed a GTC order with us, it would stay open until it is filled, canceled by you, or until
the last day of the next calendar month. If the order is filled, the broker or specialist will report
the fill to us. You can choose to be contacted by phone, fax or e-mail. Of course, if you monitor
the Order Status section of the website, you can also see when the order is filled. You will also
receive a U.S. Mail copy of your order confirmation and fill. You should check your order
confirmation carefully no matter how it is received.
Once the order is filled another process kicks into place; one which is generally invisible to you.
First the fill is reported to the Market Data System of the exchange. This system transmits the
trade details such as the stock name, the number of shares traded and the price of the trade to all
interested parties through the ticker tape. The trade can be seen online, TV or through other
media by the investor and other interested parties. The ticker tape will also update the
information (sometimes with a time lag) on your Quote Monitor.
The tickets sent to your brokerage firm and the brokerage firm of the person who bought or sold
the stock from you is entered into a computer. Over the next few hours, the two trades are
matched to make sure they agree. If they do not agree, the brokers meet again to settle any
differences. This will not affect your fill. Once agreement is ensured, the settlement process
begins. Settlement of the trade generally occurs three business days from the actual trade date.
Upon settlement the brokerage firms exchange (usually electronically) the stock certificates and
the money for the stock.
Understanding Bull & Bear Markets
Simply put, bull markets are movements in the stock market in which prices are rising and the
consensus is that prices will continue moving upward. During this time, economic production is
high, jobs are plentiful and inflation is low. Bear markets are the opposite--stock prices are
falling, and the view is that they will continue falling. The economy will slow down, coupled
with a rise in unemployment and inflation. In either scenario, people invest as though the trend
will continue. Investors who think and act as though the market will continue to rise are bullish,
while those who think it will keep falling are bearish.
The basics of bull and bear markets will be reviewed in this tutorial. Specifically we will cover
the following:
What Drives Bull and Bear Markets?
Predicting Bull and Bear Markets
Investing During Bull Markets
Investing During Bear Markets

What Drives Bull and Bear Markets?
What causes bull and bear markets? They are partly a result of the supply and demand for
securities. Investor psychology, government involvement in the economy and changes in
economic activity also drive the market up or down. These forces combine to make investors bid
higher or lower prices for stocks.
To qualify as a bull or bear market, a market must have been moving in its current direction (by
about 20% of its value) for a sustained period. Small, short-term movements lasting days do not
qualify; they may only indicate corrections or short-lived movements. Bull and bear markets
signify long movements of significant proportion.
There are several well-known bulls and bears in American history. The longest-lived bull market
in U.S. history is the one that began about 1991 and is still climbing. Other major bulls occurred
in the 1920s, the late 1960s and the mid-1980s. However, they all ended in recessions or market
crashes.
The best-known bear market in the U.S. was, of course, the Great Depression. The Dow Jones
Industrial Average lost roughly 90 percent of its value during the first three years of this period.
There were also numerous others throughout the twentieth century, including those of 1973-74
and 1981-82.
Concluding Remarks
There are many investment methods that seasoned investment professionals use to take
advantage of opportunities during bull or bear markets. Methods such as dollar-cost averaging,
selling short, and diversification exist. Understanding well-founded strategies will help you to
improve your chances for superior performance in either market environment.
How It Starts
News about a company hits the wires, like:
An Initial Public Offering (IPO).
Change in a company's earnings, positive or negative.
Recommendation by an analyst or publication.

Know What You're Buying
What do you know about the company you're buying? Have you researched it? Buying a stock
on impulse or hearsay isn't smart investing. Be sure the company you're buying a piece of is one
you really want.
Be Aware of How the Trading Process Works
Educating yourself about investing is an ongoing process. If you're a new investor or need a
review of trading procedures, pick up a book like The Wall Street Journal Guide to
Understanding Money and Investing, take a virtual trip to the New York Stock Exchange on the
Web at www.nyse.com (click on Education), or locate an investing club in your area through the
American Association of Individual Investors at www.aaii.com.
Stay on Track with Your Investment Strategy
When you're considering a stock, first see if the company meets your investment objectives. If
you haven't formulated an investment strategy yet, now is a good time to start. Begin by
determining your goals and your time horizon, then choose the investments that will best meet
them.
Weigh the Risk . . . Before You Click
Before you place a market order for a volatile stock, ask yourself how much you could afford to
lose in the event of sweeping price fluctuations. Don't risk spending more than you can afford.
Timing Is Everything
If you're planning to place an opening market order, make sure your order is entered before 9:20
a.m. Eastern Time. Otherwise, your order may not queue until after the pre-open is completed.
At the end of the day, enter market orders at least 10 minutes before closing or your order may
not be executed.
Why Watch Market Indicators?
A common and effective way to gain perspective on stock price fluctuations is to compare the
movement of your stocks to that of indices or market indicators. About 100 years ago, as the
number of individual stocks grew, the need to measure how the stock market performed became
obvious. In 1896 The Dow Jones Company took groups of stocks and averaged their prices to
create the first indices, the Dow Jones Averages. They created four different indices: one for
industrial companies, one for utilities, one for transportation companies and a composite that
included the three other indices.
In the 1920s, Standard & Poor's Corporation (S&P) created separate indices. These indices also
measured the market as a whole in addition to some sectors of the market. In 1957, when
technology enabled the companies to start calculating their indices on an hourly basis, S&P
created the S&P 500 Index, which measured the performance of a larger proportion of the market
compared to the more popular Dow Jones Industrial Index.
Over the years, the S&P and Dow Jones indices have remained popular, leading both companies
to create other indices. In addition, other companies and even the exchanges themselves have
created more indices.
Different indices are calculated in different ways. Few remain as simple averages. An index
moves when the stocks in it move. When a stock in an index goes up or down, so does the index.
Hence, when you hear that the Dow Jones closed at 10,500, down 20 points for the day, it means
that the average of the prices of the 30 stocks that comprise the Dow is 10,500 and the combined
value of these 30 stocks (as calculated by the index) dropped 20 points during that day's trading.
Calculation method aside, all indices measure the performance of the stock market or some
subsection of it on a continuing basis throughout each trading day. By tracking an index, or a
variety of indices, investors can quickly gauge market trends that may impact investment
decisions.
What is the point of following the indices when what you care about is your own stock portfolio
performance?
Indices often reflect trends in the market and in the economy. Watching overall market
performance can be the key to making smart decisions about your individual investments. For
example:
Indices can function as benchmarks to compare the performance of the stocks you own
against the market in general.
Comparing today's market movement with similar market movements from the past
may help you become aware of trends, and the best times to buy or sell.

Dow Jones Industrial Average
One of the best-known market indicators, the Dow Jones Industrial Average, is comprised of 30
leading companies. Calculated by adding the prices of these 30 stocks, the Dow is now
considered a figure that indicates the general state of the market. Originally, the Dow divided the
sum of the prices of the 30 stocks by 30, giving a true average. However, to be consistent every
time a stock split or paid a dividend, the number 30 had to be adjusted. Now, over 100 years
later, the sum of the prices of the 30 stocks is divided by a number less than one! Since a $1
movement in the price of a $100 stock counts equally with a $1 movement in the price of a $20
stock, the Dow Jones is considered a price weighted index.
Dow Jones Chart 9/13/99 1:37 PM
Last: 11,033.49
Change: +5.06
Open: 11,027.40
High: 11,042.36
Low: 10,982.20
Volume: 35,816,500
Percent Change: +0.05%
Yield: 1.58%
P/E Ratio: 27.99
52 Week Range: 7,399.38 to 11,428.94

Charles Dow designed the average to represent the current business market, which in 1896
included industries such as sugar, leather, tobacco, gas, rubber and coal. Today the DJIA is led
by retailers, oil, technology, pharmaceutical and entertainment companies. The only company on
the original list that is still included today is General Electric.
S & P 500 Index
Created in the 1920s by the Standard and Poor's Corporation (S & P), this index tracks 500
companies in leading industries: transportation, utilities, financial services, technology, health
care, energy, communications, services, capital goods, basic materials, consumer products,
cyclicals and more. Many consider it the most accurate reflection of the U.S. stock market today.
This high regard has led many money managers and pension plan administrators to use it as a
benchmark for judging the overall performance of their fund against the stock market.
Since the calculation for this index equals the price of each stock multiplied by the number of
shares held by the public, the companies with the most shares make the greatest impact. This is
known as a market weighted index.
Nasdaq Index
This index tracks the stocks on the National Association of Securities Dealers Automated
Quotation System (Nasdaq) stock market. Since many new companies elect to join the Nasdaq,
the number of stocks on the Nasdaq has grown from 100 to more than 5,500 today. Because this
index includes many companies in the technology sector where market trends change quickly,
this index can be volatile
Ameritrade Online Investor Index
The Ameritrade Online Investor Index tracks the daily buying and selling activity of individual
online investors at Ameritrade, Inc.
While most major market indices include the activity of institutions and mutual fund companies,
the Online Investor Index is unique in that it helps you understand what individual investors are
doing in relation to the stock market.
The Online Investor Index does not measure price changes or volume-other indices do that.
Instead, the Index measures buyer participation as a behavioral indicator related to investor
confidence.



About the Frankfurt Stock Exchange
The roots of FWB Frankfurter Wertpapierbrse (Frankfurt Stock Exchange) go back to the
period of medieval fairs. The Frankfurt autumn fair is first mentioned during the Assumption
holiday in the year 1150. The autumn fair is believed to have had its origin in the 11th century as
a harvest fair. Since the year 1330, when Emperor Ludwig the Bavarian expanded this privilege
to include a spring fair as well, the city became an important center for commercial and
monetary transactions. As a result of the trading activity during the fair, the manufacture of
goods on order gradually developed into merchandise production for an open and nationwide
market.
Already at the beginning of the sixteenth century, due to its well-known fairs Frankfurt had
become so prosperous that Luther termed the city 'the silver and gold hole' of the German
Empire. Through the immigration to Frankfurt of Dutch and French merchants who had been
persecuted because of their Protestant belief, during the sixteenth century wholesale commerce
and the banking sector also became established in Frankfurt. Merchants from all over Europe
came to Frankfurt in order to engage in trade.
Since there was still no single currency either in Europe nor in the German Empire, and the
various countries fell apart into numerous small economic regions with their own monetary
systems, payment was based on a large variety of coins. Because of this, monetary transactions
in Frankfurt proved to be extremely troublesome. The confusing abundance of means of
payment and the free exchange rates made it easy to engage in usury and swindles. To counter
the deterioration of coinage, merchants at the fair met in 1585 in order to establish uniform
exchange rates. Today, this event is regarded as the moment of the Frankfurt Stock Exchange's
birth.
FWB Frankfurter Wertpapierbrse (the Frankfurt Stock Exchange) is one of the world's largest
trading centers for securities. With a share in turnover of more than 90 percent, it is the largest
of Germany's seven stock exchanges. Deutsche Brse AG operates the Frankfurt Stock
Exchange, an entity under public law. In this capacity it ensures the smooth functioning of
exchange trading in Frankfurt.
The Frankfurt Stock Exchange facilitates advanced electronic trading, settlement and
information systems. Thus, it is able to meet the steadily growing requirements of cross-border
trading. Besides traditional floor trading, its fully electronic trading system Xetra is one of the
leading electronic trading platforms in the world. With its launch in 1997, the Frankfurt Stock
Exchange succeeded not only in strengthening its own competitive position. It also created
attractive framework conditions for foreign investors and market participants.
Today, the Frankfurt Stock Exchange is an international trading center. This is also reflected in
the structure of its participants. Some 140 of around 300 market participants come from abroad.



Management Board of the Frankfurt Stock Exchange
As the executive body of FWB Frankfurter Wertpapierbrse (the Frankfurt Stock Exchange),
an entity under public law, the Management Board is responsible for all tasks not expressly
assigned to other exchange bodies.
The legal foundations for the activities of the Management Board are anchored in the Stock
Exchange Act. In accordance with its provisions, the Management Board is responsible for
managing the Frankfurt Stock Exchange. Individual executive tasks, assigned to the
Management Board, include: admission of persons and companies to exchange trading decisions
on the inclusion, suspension and discontinuance of an official listing of securities decisions on
the price-fixing of securities definition of the organization and business procedures of the
Frankfurt Stock Exchange maintaining order on the trading floor premises.

The members of the Management Board of the Frankfurt Stock Exchange are full-time
employees and in line with the organizational model of a stock corporation are controlled by
the Exchange Council. They ensure that exchange-relevant laws, ordinances, standard terms and
conditions and other regulations are implemented and complied with accordingly. In this context
the Management Board may assign responsibility for the carrying out of these tasks to other
persons.

As the executive body of the Frankfurt Stock Exchange, an institution under public law with
partial legal capacity, the Management Board is thus a public administration authority. It may
issue administrative acts addressed to third parties and is thus a public authority under
administrative law. Taking in the exchange atmosphere:
Deutsche Brses Visitors Center offers you an opportunity to visit the stock exchange.
Deutsche Brse Group - From Trading Floor to Electronic Marketplace:


Deutsche Brse has also proved its innovation skills as a stock market organizer. In March 1997,
it established Neuer Markt, thereby giving smaller growth companies completely new
opportunities for raising equity. Transparency requirements were particularly stringent for this
new market segment.

In response to the Fourth Capital Market Promotion Act, Deutsche Brse reformed the German
stock market. Since 1 January 2003, issuers at FWB Frankfurter Wertpapierbrse (the
Frankfurt Stock Exchange) have been able to choose between a listing in either Prime Standard
or General Standard. Whereas Prime Standard integrates the stringent transparency requirements
of Neuer Markt, the statutory requirements apply in General Standard. Neuer Markt was closed.
In March 2003, TecDAX was launched as the new blue-chip index for technology shares.
With the Introduction of Entry Standard within the Open Market in October 2005, a new
segment for small and medium-sized companies was created. Their shares can be included in
exchange trading while meeting less stringent formal requirements. Since October 2008, the sub
segments First Quotation Board and Second Quotation Board structure the Open Market.

New products and initiatives for private investors
In April 2000, the market segment for ETFs, XTF was introduced, making it possible to
continuously trade index funds at a stock exchange in Germany for the first time. Since
November 2000, actively managed funds have also been listed in the market segment Active
ETFs.
New upper limits on brokerage fees for floor trading were implemented in April 2005 for
warrants, knock-outs, certificates and reverse convertibles orders. Since July 2005, private
investors have been guaranteed no-spread trading in DAX, MDAX, TecDAX and SDAX
titles at the Frankfurt Stock Exchange.
Since April 2006, Deutsche Brse covers international markets in the new index family
DAXglobal. With the introduction of ETC Exchange Traded Commodities in November 2006,
investors gained access to a broad range of euro-denominated commodities for the first time.
In November 2007, Deutsche Brse created an independent segment for companies from the real
estate sector. REITs Real Estate Investment Trusts are traded on the stock exchange and add
to the spectrum of real estate investments available to investors.
Since April 2008, all securities on Scoach, the exchange for certificates and warrants, are
tradable on Xetra. Scoach is a joint venture between the Swiss SIX Group (formerly SWX
Group) and Deutsche Brse AG. It offers trading in more than 300,000 structured products.

International focus
The listing platform of Deutsche Brse is growing increasingly international. In 2007, a
considerable number of foreign companies made their stock exchange debut in Frankfurt. For
the first time, several IPOs were listed by companies from China, Russia and the Ukraine.
Deutsche Brse offers the lowest capital costs among the worlds leading stock exchanges in all
three listing segments, Prime, General and Entry Standard.

Deutsche Brse Group has offices in key financial centers around the globe: in Europe, the
Group has offices in London, Paris, Moscow and Zurich; in the US, in Chicago and New York,
and in Asia in Dubai, Hong Kong, Singapore and Tokyo. The company aims to expand its
service for a growing number of local customers and maintains contact with national authorities
and capital market institutions. In cooperation with its partners around the world, the group
promotes the internationalization of the financial markets, thereby opening them to European
and international investors and companies alike.

Introduction of the market indicator DAX
DAX was introduced in 1988. Today, it is one of the worlds most well-known blue-chip
indices. Deutsche Brse AG was founded in 1993. It has since been the operating body of
FWB Frankfurter Wertpapierbrse, entity under public law, or, as it is better known outside of
Germany, the Frankfurt Stock Exchange.












About London Stock Exchange

The London Stock Exchange is at the heart of the global financial market and is home to some of
the largest, most successful and dynamic companies in the world.
The London Stock Exchange is a stock exchange located in London, United Kingdom. Founded
in 1801, it is one of the largest stock exchanges in the world, with many overseas listings as well
as British companies. The exchange is part of the London Stock Exchange Group and so
sometimes referred to by the ticker symbol for the group, LSE.
The London Stock Exchange is one of the worlds oldest stock exchanges and can trace its
history back more than 300 years. Starting life in the coffee houses of 17th century London, the
Exchange quickly grew to become the Citys most important financial institution. Over the
centuries following, the Exchange has consistently led the way in developing a strong, well-
regulated stock market and today lies at the heart of the global financial community.
Here are some of the milestones in the story of the London Stock Exchange.
1991
The governing Council of the Exchange is replaced with a Board of Directors drawn from the
Exchange's executive, customer and user base. The trading name becomes The London Stock
Exchange.
1995
We launch AIM our international market for growing companies.
1997
SETS (Stock Exchange Electronic Trading Service) is launched to bring greater speed and
efficiency to the market. The CREST settlement service is launched.
2000
We transfer our role as UK Listing Authority with HM Treasury to the Financial Services
Authority (FSA). Shareholders vote to become a public limited company: London Stock
Exchange plc.
2001
We list on our own Main Market in July. We begin our 200th anniversary celebrations.
2003
We create EDX London, a new international equity derivatives business, in partnership with OM
Group. We acquire Proquote Limited, a new generation supplier of real-time market data and
trading systems.
2004
We move to brand new heaadquarters in Paternoster Square, close to St Paul's Cathedral.
2007
The London Stock Exchange merges with Borsa Italiana, creating London Stock Exchange
Group
Structure of London stock Exchange :
The London Stock Exchange has four core areas:
Capital markets
We have a choice of markets that put UK and international companies in touch with one of the
worlds deepest pools of investment capital.
Trading
Our trading services are designed to maximise liquidity in the stocks traded on them. From our
premium fully electronic order-driven trading platforms for liquid UK and international
securities, through to our quote driven market maker platforms for less liquid securities.
Informations services
Every second of the trading day we generate information ranging from data on individual trades
and share price movements to company announcements.
Derivatives
EDX London was created to bring the cash equity and derivatives markets closer together,
broadening the scope of equity derivatives trading while cutting down risk and cost. We are
committed to developing our market in covered warrants and work closely with issuers to meet
the needs of the market and to enhance the services we offer.