The Current State of Asia-Pacific Stock Exchanges : A Critical Review of Market Design

This paper provides a review of the market microstructure of ten Asia-Pacific stock exchanges. Asia-Pacific exchanges face significant challenges in an increasingly global and competitive world equity market. These exchanges need to provide an efficient, fair and competitive trading environment if they are to attract new listings and attract investors. This paper documents significant differences in market design across Asia-Pacific exchanges and many of these features are at odds with the existing microstructure research. Achieving competitive markets may involve a review of market design and regional consolidation. Failure to increase attractiveness may result in Asia-Pacific exchanges losing market share in the global equity market. A review of current best practice in a number of critical microstructure areas is useful for market organizers to assist in policy development, is helpful for academics wishing to undertake empirical research in these markets and is a source for future research ideas