When stock exchanges started up they were often either state-owned or mutually-owned by their members in order to share operational costs between market participants. It’s an interesting example when you compare it to the way that we all use the internet
today: by sharing the same infrastructure it has brought down the cost dramatically. All members of an exchange were also on a pretty equal footing, and so they could all compete against each other and even the small firms could compete against the big firms.
Even though we may not recognise it, sharing infrastructure has become part of our daily approach to life. As retail customers, if a bank told us that it wasn’t willing to share our existing home internet connection to let us access the bank’s web site,
and we would have to implement a separate internet connection to access the bank, we probably would move our business elsewhere. That’s another thing that sharing can bring – it can allow for choice and for competition.
Major banks and investment firms are themselves recognising how their world has changed since stock exchanges started to go electronic back in the 1980s, and are starting to raise the issue that the industry can’t afford to continue to invest in separate
solutions and must re-learn how to to share infrastructure.
If you’ve read Robert Fulghum’s “All I really need to know I learned in Kindergarten”, you may remember the first thing on his list of those vital need-to-know things: Share Everything.