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US Investment Markets Born
US investments are born:
- Buttonwood agreement was signed in 1792.
- Created the new York stock exchange
- Signed under a buttonwood tree on 86 wall street
- Stockbrokers could only deal with each other. Therefore no auctioneers.
- Set a commission rate of 0.25% -
All shares must be registered
All shares must be registered Watered Stock Event:
- “Watered stocks”- shares issued by a company without authorization
- Eliminate this = all shares must be registered. Gold Speculation Tanks Market Event:
- Investors invest humongous amounts of money into gold as a speculation
- Fails and results in Black Friday (Septmber 24) -
Stock Market Crash of 1929
Black Thursday:
- The stock prices fall sharply.
- Nearly 13 million shares are affected. Black Tuesday:
- The stock prices continuously to fall.
- Almost 16 million shares are traded.
- The Dow Jones Industrial Average is at the peak of 281.17 on September 3, but it falls to only 230.07 on October 29.
- It was a symptom of the Great Depression. -
The Securities Act of 1933 and 1934
The Securities Act of 1933:
- Any offer or sale of securities using the means and instrumentalities of interstate commerce be registered with the SEC
- First major federal legislation to regulate the offer and sales of securities.
- Set up securities exchange act The Securities Exchange Act 1934:
- To provide full disclosure to investors
- Protect fraud in the connection with sale of securities -
Not-for-Profit
NYSE Not-for-Profit:
- On February 18, 1971, the NYSE is incorporated as a not-for-profit organization. -
Fixed Commissions Abolished
1975 Fixed commissions abolished:
- In 1972, the SEC had acted to end fixed commissions on transactions above $500,000.
- Congress had also been studying legislation mandating the end of fixed commission rates "in the interests of the investing public" and for the "long-term benefit of the securities industry."
- It phases in fully-competitive commission rates and end the fixed-rate structure. -
Largest One-Day Percentage Drop
Largest One-Day Percentage Drop:
- On October 10, the Dow Jones Industrial Average drops 508 points.
- It is the largest one-day drop.
- The drop affects 604 million shares.
- After the fall, the prices increase on the next day. -
NYSE and ARcaEx Merge
NYSE and ArcaEx Merge:
- The NYSE Group, Inc, is formed out of the merger of the New York Stock Exchange and Archipelago Holdings, Inc.
- The merger is the largest-ever event at that time.
- In 2009, The NYSE Arca becomes the world's second largest electronic communication network in terms of shares traded. -
NYSE and Euronext Merge
NYSE and Euronext Merge:
- On April 4, the NYSE Euronext is formed out of the merger of NYSE Group, Inc.
- The NYSE Euronext operates the world's largest and most liquid exchange group.
- It offers the most diverse array of financial products and services.
- NYSE Euronext becomes the a world leader for listing, trading in cash equities, equity and interest exchanges in over five countries.
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NYSE Euronext Acquires American Stock Exchange
NYSE Euronext Completes Acquisition of American Stock Exchange:
- The NYSE Euronext becomes the world's third-largest U.S. equity options marketplace.
- Advances global leadership in ETFs, cash equities closed-end funds and structured products.
- Over 500 Amex-listed companies join NYSE Euronext.
- The transaction is expected to produce annualized run-rate cost savings of more than $100 million by the end of 2009.
