This chapter shows the cases that AMAFMMs investigated financial regulations and rules. The first one investigated an adequate tick size and showed that a market having a tick size larger than volatility will lose the market share of trading volume to other markets. This case was the first to discuss an adequate tick size. The second one investigated the impact of the rule for investment diversification and showed when the fundamental price of drops sharply, the market price reaches the fundamental price after the sharp drop and then overshoots it. The third one compared the effects of price limits and short selling regulations and showed that the short selling regulation caused the trading prices to be higher than the fundamental value, and surveyed an adequate parameter of the price limit and found a condition of the price limit to prevent the overshoots. The last one investigated whether the price limit or the circuit breaker is more effective to prevent falling market prices, and showed that both are basically equally effective when their parameters are the same.

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Regulations/Rules

  • Takanobu Mizuta,
  • Isao Yagi

摘要

This chapter shows the cases that AMAFMMs investigated financial regulations and rules. The first one investigated an adequate tick size and showed that a market having a tick size larger than volatility will lose the market share of trading volume to other markets. This case was the first to discuss an adequate tick size. The second one investigated the impact of the rule for investment diversification and showed when the fundamental price of drops sharply, the market price reaches the fundamental price after the sharp drop and then overshoots it. The third one compared the effects of price limits and short selling regulations and showed that the short selling regulation caused the trading prices to be higher than the fundamental value, and surveyed an adequate parameter of the price limit and found a condition of the price limit to prevent the overshoots. The last one investigated whether the price limit or the circuit breaker is more effective to prevent falling market prices, and showed that both are basically equally effective when their parameters are the same.