Impact of Technology on Stock Market

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Impact of Technology on Stock Market I. Introduction Nowadays technology has become a crucial element of the stock market. New technology is revolutionizing the stock market and has significantly changed the way the stock market operates. Information and communications technologies, the most important of which is the Internet, are critical to this revolution while many other technologies are also contributing. Technology has brought unprecedented opportunities for the development of the stock market. Issuers, investors and other market participants all greatly benefit from that. Meanwhile, a high pace of technological advances has presented new challenges to the regulators of the securities market. II. Technology on the primary stock market The primary stock market is part of the stock markets that deals with the issuance of new stocks. New technological advances have elevated the primary market in almost all aspects, such as: 1. Web-based prospectus and other electronic disclosure Issuer used to provide paper prospectus. The production and dissemination of paper prospectus were quite costly. But now electronic prospectus can be easily posted online, which become more accessible for investors than paper prospectus. Moreover, current web site prospectus may also consist of audio and video components, which make the prospectus more understandable for the public investors. Issuer is also required to disclose much other related information timely, which has become quite easy and inexpensive with Internet’s powerful capacity to disseminate information to a large number of prospective investors instantaneously. 2. Electronic roadshows For a traditional stock offering, issuer’s executives are usually engaged in roadshows to targeted investors, usually a relatively small group of sophisticated large institutions. And the travel-based marketing campaigns are
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