Stock markets that flummox the masses don't do any good

They have grown so complex, fragmented and opaque that they don’t serve their stated purpose. Rather than a place where individual and professional investors can put a value on shares and where companies go to raise capital, the markets today look more like a video game. The trouble is, it’s one where only a few understand all the rules.

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Excessive complexity has costs. Individuals, wary of an uneven playing field, may choose not to invest. Long-term investors, frustrated by a market that doesn’t value their participation, may take their trading to overseas venues or alternative private networks. Companies, unaccustomed or unprepared for the amount of work needed to go public, may look for other forms of capital, such as debt or private equity.

Capital markets work best when all the participants — investors and companies — come together in one place. Although everyone may not have the same interests, at least there is an understanding that a common set of rules exists.

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