investors issuers and other markets dilemma in the US and references

 ‘Stock Exchange Law’
Stock exchange law is today a subdivision of capital markets or securities
law. Its main objective is to strengthen public confidence in the financial

20 Id. at art. 4(1)(14).
21 Börsengesetz [Exchange Act], July 16, 2007, promulgated in GESETZ ZUR UMSETZUNG
DER RICHTLINIE ÜBER MÄRKTE FÜR FINANZINSTRUMENTE UND DER DURCHFÜHRUNGSRICHTLINIE DER KOMMISSION [Finanzmarktrichtlinie-Umsetzungsgesetz], July 16 2007,
BUNDESGESETZBLATT, Teil I [BGBL. I] at 1330, 1351-68, (Ger.).
22 “Börsen sind teilrechtsfähige Anstalten des öffentlichen Rechts, die nach Maßgabe dieses
Gesetzes multilaterale Systeme regeln und überwachen, welche die Interessen einer Vielzahl von Personen am Kauf und Verkauf von dort zum Handel zugelassenen
Wirtschaftsgütern und Rechten innerhalb des Systems nach festgelegten Bestimmungen in
einer Weise zusammenbringen oder das Zusammenbringen fördern, die zu einem Vertrag
über den Kauf dieser Handelsobjekte führt.” Id. § 2(1). Our English translation is taken
from Fleckner, Exchanges, supra note 4, at 659. All subsequent translations are those of the
authors.
23 Id.
7:513 (2013) Stock Exchange Law 521
markets (1.), and it covers two regulatory areas: the organization of exchanges
(2.) and the process of trading at exchanges (3.).
1. Main Objectives and Key Legislation
Whether and to what extent financial markets should be regulated has always been a topic highly controversial among investors, issuers, regulators,
and scholars. Today there is a broad consensus that some sort of regulation is
indispensable; otherwise, investors would be less willing to provide business
corporations with the money that the latter need to finance their projects.
Stock exchanges fit into this general picture. Many scandals have occurred at
exchanges or in their environment, causing investors and—

as a result of the
far-reaching implications of those scandals—the general public to call for
more exchange regulation.
Compared to other branches of commercial and business law, stock exchange law is relatively young; within capital markets or securities law,
though, stock exchange law constitutes one of the first roots. As has already
been mentioned, the French Code de commerce included a few provisions on
commercial exchanges as early as the beginning of the 19th century (1807).
24
While the German Allgemeines Deutsches Handelsgesetzbuch (1861) abstained from
regulating exchanges, it nonetheless frequently referred to the Börsenpreis, the
exchange price.25 This is why some German states decided to provide for
some basic exchange rules in their introductory acts.26 It took another three
and a half decades, however, before Germany obtained a detailed regulatory
regime on the federal level, the Börsengesetz (1896).27 The next major steps
were the Securities Exchange Act (1934)28 in the United States and, more than
fifty years later and only two and a half decades ago, the Financial Services
Act (1986)29 in the United Kingdom. Today, all major jurisdictions have a
comprehensive regulatory regime for stock exchanges. In France, it is the
second title of book four of the monetary and financial code, the Code

24 CODE DE COMMERCE [C. COM] at art.

 71-73 (1807) (Fr.).
25 E.g., ADHGB of 1861, art. 343, 353 (Ger.).
26 See, most notably, art. 3 of the Prussian EINFÜHRUNGSGESETZ ZUM ALLGEMEINEN
DEUTSCHEN HANDELSGESETZBUCH [INTRODUCTORY ACT TO THE COMMERCIAL CODE],
June 24, 1861, GESETZ-SAMMLUNG FÜR DIE KÖNIGLICHEN PREUßISCHEN STAATEN
[PreußGS] 449-688 (Ger.) [hereinafter EINFÜHRUNGSGESETZ]; for an index of the
sources, see Fleckner, Gesetzgebung, supra note 10, at 999, 1041-45.
27 Börsengesetz [Exchange Act], June 22, 1896, RGBL. at 157-76 (Ger.).
28 Securities Exchange Act of 1934, 15 U.S.C. § 78a-78jj (1934).
29 Financial Services Act, 1986, c. 60 (Eng.).
522 Virginia Law & Business Review 7:513 (2013)
monétaire et financier (2000);30 in Germany the new version of the Federal Exchange Act, the Börsengesetz (2007);31 and in the United Kingdom part eighteen
of the Financial Services and Markets Act (2000).32
2. Exchange Organization
Though they have different approaches and consequences, stock exchange laws all over the world govern the organization of the exchanges or
their operators, respectively. Typical provisions concern the preconditions to
operate an exchange, the structure of the exchange, or the regulatory powers
vested with the exchange. In German, these rules are succinctly referred to as
Börsenorganisationsrecht, exchange organization law. Most of these provisions
belong to public law (in the traditional continental European meaning).
Statutory requirements for the organization of exchanges are more problematic than many other provisions of securities law because they affect investor confidence in the financial markets, if at all, only indirectly. This is why
policymakers with realistic self-assessment would probably rather let the exchanges find a structure that fits their needs than prescribing certain organizational features.33 Against this background, it is no surprise that in Germany, as
the most (in)famous example, the organizational requirements for stock exchanges have long been met by sharp criticism.
34 Similar issues have been

30 Loi 2000-1223 du 14 décembre 2000 de code monétaire et financier, partie législative
[Securities Regulation Act] Journal Officiel de la République Française [J.O.] [Official Gazette of France], Dec. 16, 2000, p. 20 004, ratified by Loi 2003-591 du 2 juillet 2003 [Law
2003-591 of July 2, 2003] J.O., July 2, 2003, art. 31, p. 11 192 (Fr.).
31 Börsengesetz [Exchange Act], July 16 2007, BGBL. I at 1330, 1351-68 (Ger.).
32 Financial Services and Markets Act, 2000, c. 8, sch. 11 (Eng.).
33 Fleckner, Exchanges, supra note 4, at 659.
34 For an overview, see Klaus Hopt & Harald Baum, supra note 18, at 287-467; see also,
JOCHEN MUES, DIE BÖRSE ALS UNTERNEHMEN (1999) (Ger.); TILMAN BREITKREUZ, DIE
ORDNUNG DER BÖRSE: VERWALTUNGSRECHTLICHE ZENTRALFRAGEN DES WERTPAPIERBÖRSENWESENS (2000) (Ger.); Johannes Köndgen, Mutmaßungen über die Zukunft der europäischen Börsen, in FESTSCHRIFT FÜR MARCUS LUTTER ZUM 70. GEBURTSTAG 1401-20
(2000) (Ger.); Horst Hammen, Börsenorganisationsrecht im Wandel, 46 DIE AKTIENGESELLSCHAFT 549-67 (2001) (Ger.); Siegfried Kümpel, Zur öffentlichrechtlichen Organisation der
deutschen Wertpapierbörsen, 3 ZEITSCHRIFT FÜR BANK- UND KAPITALMARKTRECHT 3-13
(2003) (Ger.); HANNO MERKT, EMPFIEHLT ES SICH, IM INTERESSE DES ANLEGERSCHUTZES
UND ZUR FÖRDERUNG DES FINANZPLATZES DEUTSCHLAND DAS KAPITALMARKT- UND
BÖRSENRECHT NEU ZU REGELN?, GUTACHTEN G, 64TH DEUTSCHER JURISTENTAG (2002)
(Ger.); JENS BLUMENTRITT, DIE PRIVATRECHTLICH ORGANISIERTE BÖRSE (2003) (Ger.);
Harald Baum & Klaus J. Hopt, Zum Stand der Börsenreform: Umgesetzte Reformziele und offene
Fragen, in FESTSCHRIFT ZUM 65. GEBURSTAG FÜR BERND RUDOLPH 537-56 (2009) (Ger.);
7:513 (2013) Stock Exchange Law 523
raised in many other countries, for instance, in the United States.35
3. Exchange Trading
Stock exchange laws also regulate what happens at the exchanges, most
notably the process of trading as well as the admission of items and dealers to
trading, albeit in a vastly different way from jurisdiction to jurisdiction. In
German, this category of rules is known as Börsenhandelsrecht, exchange trading
law. Many of these provisions are those of public law, but there are also some
rules that are genuinely private law (again in the traditional meaning of continental Europe), especially concerning the general terms and conditions that
become part of the contracts entered into at the exchange.