Vocabulary

Antithesis полная противоположность

Millennium тысячелетие

To surpass превосходить

Advent приход, появление

Financial futures финансовые фьючерсы

Synergy синергия, большая эффективность в результате слияния

Derivative market рынок производных ценных бумаг

Prima cyпервенство

Exercise 12. Answer the following questions:

1. What services does the Stock Exchange render to the investor?

2. Is the Stock Exchange a highly organized market? Why?

3. Is the stock market/ stock exchange important to industry and the government?

4. What does the broker do? How does he earn his living?

5. What are functions of an issuing house?

6. How can you account for internationalization of the stock market?

7. Will Europe have a single European Securities Market?

Exercise 13. Find the Russian equivalents for the following:

1. to encourage the listing of foreign exchange

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2. antithesis of a free market economy

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3. the economy of the third millennium

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4. the commercial and financial centre of America

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5. to have the best strategic approach and the most flexibility

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6. resistance to changes

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7. the advent of financial futures

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8. to be a significant contributor to the strength of the financial system

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9. an accident of history

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10. no finds or assets can be contributed to any political party or organization

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Exercise 14. Find the synonyms for the words in italics:

1. VimperlCom’s appearance on NYSE is a historic event for Russia.

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2. It marks this country’s crossing the border to join the world market.

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3. It is great event not only for Russia and our Exchange… .

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4. Why has NYSE been unquestionably the leading one for such a long time in such a competitive industry as securities?

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5. Is it possible that Russia’s “NYSE” may eventually be located in St. Petersburg or Yekaterinburg than Moscow?

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6. The most successful exchange will be created by the people who have the best strategic approach and the most flexibility.

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7. Resistance to change is part of the human condition, and Wall Street is no different.

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8. But the most dramatic evidence can be seen from… .

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9. Many believe that the primacy of the New York Stock Exchange is due not only to the accident of its location.

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10. We have a rule that no funds or assets of the Exchange can be contributed to any political party or organization.

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Exercise 15. Translate the sentences into Russian.

1. VimperlCom’s appearance on NYSE is a historic event for Russia, as it marks this country’s crossing the border to join the world market.

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2. The New York Stock Exchange has always encouraged the listing of foreign companies.

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3. It is great event not only for Russia and our Exchange, but for all free market economies on earth.

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4. New York City has two stock exchanges; there are another seven elsewhere in America, and hundreds across the world.

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5. The Exchange itself was largely responsible for creating the financial leadership of the city.

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6. But during the following decades, New York gradually surpassed Philadelphia as the commercial and financial centre of America.

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7. The most successful exchange will be created by the people who have the best strategic approach and the most flexibility.

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8. Yes, a good example is the advent of financial futures, which Wall Street initially opposed but Chicago embraced.

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9. Today, the synergy between the Chicago derivative markets and the New York Stock Exchange (NYSE) is a significant contributor to the strength of the US financial system.

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Exercise 16. Read the article below quickly to pick out the main economic indicators. Then study the vocabulary given after it.

Third and Fourth Markets

Until the 1970s the New York Stock Exchange required its member firms to trade all NYSE-listed stocks at the exchange and to charge fixed commissions. For large institutions this was expensive. In particular, the existence of a required minimum commission rate created a serious problem since it exceeded the marginal cost of arranging large trades. Brokerage firms that were not members of the exchange faced no restrictions on the commissions they could charge and thus could compete effectively for large trades in NYSE-listed stocks. Such transactions were said to take place in the third market. More generally, the term “third market” now refers to the trading of any exchange-listed security in the over-the-counter market. The existence of such a market is enhanced today by the fact that its trading hours are not fixed (unlike exchanges), and that it can continue to trade securities even when trading is halted on an exchange. On average 18 million shares were traded in the third market during each day of 1992.

Until 1976 NYSE member firms were prohibited by Rule 394 from either acting as dealers in the third market or executing orders involving NYSE-listed securities for their customers in the third market. In 1976, Rule 394 was replaced by Rule 390, which permits the execution of these orders in the third market but still prohibits member firms from acting as dealers in the third market. However, the Securities and Exchange Commission has issued a rule that permits member firms to act as dealers in securities that became listed on the NYSE after April 26, 1979. Controversy still exists over Rule 390, as some people argue that it should be abolished completely to spur competition between the NYSE and the over-the-counter market, whereas others argue that having all orders funneled to the NYSE will lead to the most competitive marketplace possible.

Many institutions have dispensed with brokers and exchanges altogether for transactions in exchange-listed stocks and other securities. Trades of this type, where the buyer and the seller deal directly with each other, are sometimes said to take place in the fourth market. In the United States some of these transactions are facilitated by an automated computer/ communications system called Instinet, which provides quotations and execution automatically. A subscriber can enter a limit order in the computerized “book”, where it can be seen by other subscribers who can, in turn, signal their desire to take it. Whenever two orders are matched, the system automatically records the transaction and sets up the paperwork for its completion. Subscribers can also use the system to find likely partners for a trade, then conduct negotiations by telephone. In recent years automated electronic facilities have been developed to permit institutional investors to trade portfolios of stocks directly with each other.