The document discusses fairness and efficiency in financial markets. It notes that fairness is important for maintaining confidence, but that markets will inevitably produce winners and losers. While individual losses cannot be prevented, regulations aim to ensure games are fair by guarding against fraud, manipulation, unequal access to information, and insider trading. The overall goal of regulation is to protect general public and individual investors while also maintaining efficient pricing.

1. Financial Market

2. Equity and efficiency
• Efficiency depends on confidence in fairness

3. Unfairness in markets
• Fairness is not measures to prevent losses
• Market produces winners and losers
• The gain of one may equal loss to other,thogh
market exchanges are advantages to both the
parties.
• Involvement in a stock market is like playing a
sport.
• The aim is not to prevent loss but to ensure
that the game is fair.

4. • The regulation of financial markets protects
the general public apart from individual
investors.
• The kind of unfairness
• fraud and manipulation – fails to report
proper information
• Manipulation – creating a false/misleading
information

5. • Un Equal information – stock analysts ,
investors acquire information
• Un equal bargaining power
• Un equal information
• Resources – money and information
• Process ability – knowledge
• Vulnerabilities ;need to protect from
exploitation

6. • Efficient pricing ; price should reflect all
available information
• Volatility ; arise out of mismatch of buy and
sell

7. Insider trading
• Inside confidential information from the
company
• Insider trading is illegal
• Inside information is considered as property
• The fairness argument