Demutualization and customer protection at self-regulatory financial exchanges

David Reiffen, Michel Robe

Research output: Contribution to journalArticlepeer-review


In the past decade, many of the world's largest financial exchanges have demutualized, i.e., converted from mutual, not-for-profit organizations to publicly-traded, for-profit firms. In most cases, these exchanges have substantial responsibilities with respect to enforcing various "trade practice" regulations that protect investors from dishonest agents. We examine how the incentives to enforce such rules change as an exchange demutualizes. In contrast to oft-stated concerns, we find that, in many circumstances, an exchange that maximizes shareholder (rather than member) income has a greater incentive to aggressively enforce these types of regulations.

Original languageEnglish (US)
Pages (from-to)126-164
Number of pages39
JournalJournal of Futures Markets
Issue number2
StatePublished - Feb 2011
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • General Business, Management and Accounting
  • Finance
  • Economics and Econometrics


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