Why are stock markets consolidating?

Over the past several years stock markets, namely American stock markets, are trying to purchase stock markets outside of the USA. Why?

Note: Before the American stock markets looked outside of their borders, they decided to change from a non-profit organization to a for-profit organization and then put their organizations on their own public stock market. After they purchased one another in the USA (i.e. NYSE merged with/purchased Archipelago; NASAQ merged with/purchased Instinet; CBOT plans to merge with the CBOE).

Here are the reasons why I think you are seeing consolidation outside the USA and overall:

1. USA not the only stable and liquid market place anymore

The USA is losing it's edge of being the only safe and efficient country to operate stock markets. No longer are companies outside of the USA wanting to use USA stock markets to list and raise money. They are using their local markets or other markets outside of the USA like the LSE, AIM, Euronext, and more. These markets are now viable and stable options for them rather than looking only at the expensive NYSE and NASDAQ markets.

2. Expensive

The markets in the USA are expensive in terms of fees involved with listing and trading their shares on the markets. The markets, along with the investment banks and lawyers, charge high fees for their services.

3. Tough regulation

With more and more security laws being implemented after the Enron and MCI fraud to try to protect the investors, the USA government has gone overboard on the regulation requirements of companies publicly-listed on an American stock market. The Sarbanes-Oxley legislation that requires more reporting from public companies has made compliance more expensive. In one since, tough regulation helps make investors feel confident. However, too much regulation will scare companies away. With no companies being listed, it does not make a difference how confident investors as there will be nothing for investors to invest in.