Forex glossary of terms
Although Italian bankers played a crucial role in the birth of exchanges, Italy did not develop its own capital markets until much later.
After annexing most of northern Italy, the French Emperor Napoleon created the Milan Stock Exchange in 1808, using the same regulatory framework that he had drafted for the French market.
At first, the Milan exchange traded securities and commodities and did not get its first corporate listinga railroad companyuntil 1859. Other regional exchanges flourished throughout Italy, which became a unified nation in 1861.
Genoa, a major port, was the main Italian financial market in the 19th century, but Milan took the lead after World War I. The fascist regime imposed a tight control on the economy and stifled capital markets.
It was not until the 1980s that Italian markets got a boost from the introduction of mutual funds. Milan firmly established itself as the leading Italian market with 99 percent of overall volume, although nine other regional exchanges struggled to survive for as long as the open-outcry auction system lasted.
But broad market reforms ushered in a national computerized order-driven trading system in 1991 and Italys privatization program in the late 1990s paved the way for modern equity markets.
To manage this new challenge, the Milan Stock Exchange privatized and became the Borsa Italiana Group, launched in 1998 to run and regulate trading as well as oversee corporate disclosure. To attract liquidity, Borsa Italiana introduced remote membership, which has allowed about 130 domestic and foreign brokers to participate in Italian markets.
Borsa Italian regulates and manages the stock exchange market, along with the Italian equity derivatives market (IDEM) and the Italian interest rate derivatives market (MIF).
BIt Systems, the technology arm of Borsa Italiana, provides the IT infrastructure for the exchange and offers trading services to the financial community. Cassa di Compensazione e Garanzia or CC&G acts as central counterparty and Monte Titoli is the Italian Central Securities Depository and Settlement whose operations are highly automated.
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