Technology has profoundly impacted the regulation of financial markets in several ways: 1. It facilitates the rapid flow of information between regulators and market participants, allowing regulators to make quicker decisions that help financial markets perform better on a global scale. 2. Technology enables greater interaction and direct access between regulators and economic agents in financial markets across borders, and has led to the creation of new financial instruments and markets. 3. It has reduced information asymmetries and eliminated middlemen, making the trading process more democratic and competitive while reducing costs - changes that regulators have incorporated into updated rules to further develop financial markets.

1. JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY
MASTERS OF SCIENCE OF ECONOMICS
ACADEMIC YEAR 2015/2016
YEAR 1 SEMESTER 2
HBE3111: FINANCIAL INTERMEDIATION
Topic: THE ROLE OF TECHNOLOGY ON REGULATION OF FINANACIAL MARKETS
Names Reg. No
1 MWESIIGYE Philip HD341-C010-1233/2016
Kigali, 20th November 2016

2. Approach
• Definition of key terms
• Financial markets
• Fungibility
• Technology
• Role of technology in regulation of financial markets

3.  The term "market" is sometimes used for what are more
strictly exchanges, organizations that facilitate the trade in financial
securities, e.g., a stock exchange or commodity exchange.
 A financial market is a market in which people trade financial securities,
commodities, and other fungible items of value at low transaction costs
and at prices that reflect supply and demand. Securities include stocks
and bonds, and commodities include precious metals or agricultural
products.
 Fungibility is the property of a good or a commodity whose individual
units are capable of mutual substitution.

4.  Technology is the collection of techniques, skills, methods and
processes used in the production of goods or services or in the
accomplishment of objectives, such as scientific investigation.
According to Hughes, "Technology is a creative process involving
human ingenuity.

5. Financial intermediation and financial exchanges are based on
the exchange of information. In fact, at present, a transaction of
exchange of any financial instruments, including cash, equities,
bonds, and their derivatives, is just a recording of altered digital
information.

6. 
The role of technology on regulation of financial markets
 The impact of the technology on financial markets regulation is
multifaceted and profound. One sees immediately that, first, the Internet
facilitates information flows through the following ways.
 Information used to evaluate actions, such as analyst’s reports; software
and interfaces that facilitate information exchange, dissemination, and
evaluation which in turn has accelerated quick regulation by regulators of
financial markets thus high yields from the operation.

7.  Second, the technology facilitates interaction among economic agents
that is both regulators and market agents. This includes the exchange of
financial instruments and physical commodities, as well as of contingent
claims on these;

8.  It has also helped financial markets in creation and
enhancement of markets; and multi-party live discussion of
financial markets.
 Disintermediation and standardization: This has facilitated
easy and quick reactions of regulatory on financial markets
which enhanced economic development of sector which is
cost effective than before where we hard a lot of brokers
intervening.

9.  The Internet facilitates more direct access of economic agents
to markets and, since the Internet is truly a global network, all
of the above can be done across national borders, as well as
state and local jurisdictions.

10.  Distribution of Functions by regulators: One of the impacts of present
and future technologies on systems for delivering financial services is that
there is a real possibility of redistribution of function between and among
traditional suppliers and potential new entrants.
 Quick flow of information: And this has advanced quick decisions on
regulations which contributes to better performance on the market.

11.  The technology’s impact as a creator of new processes and
interactions. It also creates processes, goods (bonds,
derivatives and shares), and interaction that were not
possible before

12.  Also technology has played a drastic enhancement of an existing process,
the Internet has created tremendous pressure on eliminating price
discrimination based on geography or national borders, as well as in
increasing price competition among providers of standardized markets.
 It has also reduced information asymmetries which where every body
wants to deal in financial markets has all adequate information on criteria
and requirements.
 Improved existing processes of regulation where it is less time
consuming compared to previous market dealings before technology

13. • Intensification of competition: In network markets, the addition of
new competitors, say under conditions of free entry, does not
change the market structure in any significant way once few firms
are in operation. There fore this has facilitated regulators to easy the
regulations so that financial markets can perform well with regard to
world markets on finance.

14. Technology has created democratization of trading process,
by renovating existing processes such as improvement of an
existing process is the elimination of the middleman
(broker) in sending orders to financial markets which
facilitated the development of these markets as well and
trade in general.

15. o Conclusion
Financial regulators realize that while technology can greatly benefit the
markets, it can also make investors and the markets more vulnerable.
The technological advancement has solved challenges like deregulation and
globalization which has contributed to the development and better
performance of these markets.

16. Thanks for your Attention