Skip to ContentGo to accessibility page
OpenStax Logo
Introduction to Business 2e

16.8 Trends in Financial Management and Securities Markets

Introduction to Business 2e16.8 Trends in Financial Management and Securities Markets

16.8 Trends in Financial Management and Securities Markets

  1. What are the current developments in financial management and the securities markets?

Many of the key trends shaping the practice of financial management echo those in other disciplines. For example, technology is improving the efficiency with which financial managers run their operations. In the wake of a slowing economy and corporate scandals, the SEC assumed a stronger role and implemented additional regulations to protect investors from fraud and misinformation. A wave of merger mania hit the global securities markets as the securities exchanges themselves have begun to consolidate to capture larger shares of the world’s trading volume in multiple types of securities. Online brokerage firms are seeking new ways to capture and keep their customers by broadening the services they offer and keeping the fees they charge highly competitive. Two key areas where technology is playing a role is with overseeing corporate compliance required as a result of the Sarbanes-Oxley Act and advances in electronic trading platforms and niche markets.

Finance Looks Outward

No longer does finance operate in its own little world of spreadsheets and banking relationships. Most CFOs want the finance function to be viewed by their company’s business units as a strategic partner who can contribute to their success. Finance professionals therefore need a broad view of company operations to communicate effectively with business unit managers, board members, creditors, and investors. The goal is productive cooperation and teamwork between finance and the business units to meet corporate objectives. CFOs are more highly visible and active in company management than ever before. They serve as both business partner to the chief executive and a fiduciary to the board.

As a result of accounting scandals and the Great Recession, CFOs consider accuracy of financial reporting their top priority, and they also must now provide more detailed explanations of what’s behind the numbers to board members and other stakeholders. Rather than showering the board with financial reports and statistics, CFOs are crafting more focused presentations that deal with the company’s overall financial health and future prospects.27 They must also educate board members about the implications of Sarbanes-Oxley and other legislation, such as Dodd-Frank, and what the company is doing to comply with federal regulations.

Vying for the Crown

The NYSE and the NASDAQ continue to compete for the top spot in the global securities markets. The NYSE fell behind because the NSADAQ already had an electronic platform. This prompted the NYSE to respond with their hybrid market, in addition to changes to their organizational structure and merger with Archipelago, a major ECN. NASDAQ responded by expanding their reach by acquiring Instinet's INET. The NYSE made the strategic move to merge with Euronext to create the first cross-border exchange. That prompted the NASDAQ to increase its ownership of shares in the London Stock Exchange. These changes by both exchanges reduced the divide and eliminated many of the differentiating factors.

Concept Check

  1. How has the role of CFO changed as a result of the passage of the Sarbanes-Oxley Act?
  2. Describe the major changes taking place in the U.S. securities markets. What trends are driving these changes?
PreviousNext
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:

    Access for free at https://openstax.org/books/introduction-business-2e/pages/1-introduction

  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:

    Access for free at https://openstax.org/books/introduction-business-2e/pages/1-introduction

Citation information

© Apr 3, 2026 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.