To make sure
Richard Dittrich, head of customer service at the Stuttgart Stock Exchange, describes in an interview why stock exchanges are the first choice when it comes to reliability, transparency and investor protection.
finanzen.net: What is special about stock exchanges?
Richard Dittrich: Today there is a large number of trading venues for securities, which differ in their organizational form and degree of regulation. Only on a stock exchange does trading take place on the basis of the Stock Exchange Act and within a framework under public law. At the other end of the spectrum is the OTC market
Over-the-counter trading, also known as OTC. Such platforms are far less regulated.
finanzen.net: Where is this difference noticeable?
Richard Dittrich: Price determination on a stock exchange is based on a clear, binding set of rules. On a stock exchange, investors can always rest assured that their orders will be executed fairly and that, in cases of doubt, they can easily obtain their rights. Those who make their own decisions and traders who trade intensively are aware of this: Anyone who has had bad experiences with order execution or the cancellation of transactions in the OTC area appreciates the standards of a strictly regulated exchange with comprehensive investor protection.
finanzen.net: How can investors be sure that the rules will be observed?
Richard Dittrich: This is ensured by the legally required Trading Surveillance Office (HÜSt) on every stock exchange as an independent and neutral body. It seamlessly controls all trading: Are the exchange prices established properly and do they correspond to the market situation? Are the requirements of the regulations for certain trading segments and papers complied with? Are any customer complaints about individual orders justified? By examining such questions, the HÜSt also makes an important contribution to investor protection.
finanzen.net: What else characterizes stock exchanges?
Richard Dittrich: How OTC transactions come about is not immediately apparent to investors. Little information on prices and volumes is publicly available. On the other hand, not only is price determination itself clearly regulated on stock exchanges, there is also a high level of pre- and post-trade transparency. At the Stuttgart Stock Exchange, all prices are continuously displayed in real time on the Internet. Historical price data is also available online. In this way, market events and the execution of their own orders become transparent and comprehensible for private investors.