While it is appropriate for markets to compete by offering increased transparency it is not appropriate to offer lesser degrees of transparency not justified by liquidity, fairness, and efficiency concerns. Regulators assessing the competitiveness of markets operating within their jurisdiction must also consider fairness and efficiency in assessing the adequacy of the transparency of those markets. Transparency needs for particular securities should be assessed on a global basis in order to avoid a flight to opacity. Ideally, application by regulators of a common framework of analysis will tend toward global harmonization of transparency requirements and practices for particular securities. As an alternative, if non-domestic securities trade in a foreign market, and the primary, homecountry market for those securities requires complete transparency for trading, then the transparency requirements for those securities trading in the foreign country market should be the equivalent of the home country's market.
Transparency is increasingly important for today's securities markets.
The fairness and efficiency of securities markets are directly related to their transparency. By providing protections for investors, transparency encourages greater participation in the securities markets, and thereby enhances the liquidity of those markets. This increase in liquidity, in turn, increases market efficiency. Conversely, by reducing the effects of market fragmentation and increasing the pricing efficiency of securities markets, transparency also promotes fairness of the markets. For these reasons, regulators have a responsibility to assess the adequacy of the transparency of the markets operating within their respective jurisdictions.