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Capital Markets

Automated Quotations System–American Exchange
(NASDAQ-AMEX), Globex, Archipelago, and DMA &
NYFI.
The regional exchanges—such as Boston, Cincinnati,
the Midwest, the Pacific, and Philadelphia—each list a
small number of regional companies to facilitate their rais-
ing of capital in the market. The national/international
markets are the NYSE, NASDAQ-AMEX, CBT, CME,
Archipelago, and DMA & NYFI.
The NYSE, organized by twenty-four brokers in
1792, is the oldest exchange in the U.S. capital market.
The first traded company on the NYSE was the Bank of
New York. It is still traded today, but has not been contin-
uously listed on the NYSE. The NYSE states its mission
as:

To add value to the capital-raising and asset man-
agement process by providing the highest-quality
and most cost-effective self-regulated marketplace
for the trading of financial instruments, promote
confidence in and understanding of that process,
and serve as a forum for discussion of relevant
national and international policy issues.
(http://www.nyse.com/about/theorganization/
1088623922144.html)
According to the NYSE, it is “the largest equities
marketplace in the world.” The NYSE is home to some The New York Stock Exchange, April 25, 2005. AP IMAGES
2,800 world-class companies with a total global market
value of $20 trillion as of late 2005. It had a daily average
of over 1.5 billion shares traded in 2005. In late 2005 the
NYSE had 401.6 billion shares listed. These companies approximately 3,250 companies, it listed more companies
include a cross-section of leading U.S. companies, midsize and, on average, traded more shares per day than any
and small capitalization companies. Non-U.S. issuers play other U.S. market.
an increasingly important role on the NYSE. As of Octo-
ber 31, 2005, 460 non-U.S. companies worth $7.1 tril- INITIAL PUBLIC OFFERINGS AND
lion were listed on the NYSE. ROLE OF VENTURE CAPITAL
Organized in 1971, NASDAQ was the world’s first The appeal of being a public company, which requires a
electronic stock market. According to its mission state- filing with the U.S. Securities and Exchange Commission
ment, NASDAQ-AMEX’s purpose is “to facilitate capital (SEC), in accordance with the requirements of the Secu-
formation in the public and private sector by developing) rities Act of 1933, is closely related to the liquidity of
operating and regulating the most liquid, efficient and fair issued securities provided through the stock markets.
securities market for the ultimate benefit and protection Companies seeking to “go public” engage an investment
of the investor.” Its vision is: bank that will serve as underwriter for an initial issue of
stock. Generally, for large offerings, an underwriter will
to build the world’s first truly global securities form a syndicate of other investment bankers and brokers
market … a worldwide market of markets built on who will participate in the initial selling of the issue.
a worldwide network of networks … linking pools Shortly after the sale of the initial offering the stock will
of liquidity and connecting investors from all over be listed on a stock exchange.
the world … assuring the best possible price
for securities at the lowest possible cost. Venture capital, which consists of funds raised on the
(http://www.nasdaq.com/about/overview.stm) capital market by specialized operators, is one of the most
relevant sources of financing for innovative companies.
In 2005 NASDAQ was the largest electronic screen- Venture capitalists buy shares or convertible bonds in a
based equity securities market in the United States. With company. They do not invest in order to receive an imme-

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 75