Concerns that the regulatory structure of the equity markets serve the needs of brokers and traders over those of the investors whose money they manage have been highlighted in the interim report of the Kay Review.
The review, commissioned by Business Secretary Vince Cable to examine the impact of UK equity markets on the long-term performance of companies, also reported calls from senior business figures for asset managers to act as "stewards" of the firms in which they invest, rather than simply buying and selling shares for short-term gains.
Review chairman John Kay, professor of economics at the London School of Economics, made no recommendations for action in the interim report.
But he made clear that his final report, expected in the summer, will look closely at legal changes to ensure that the equity markets function primarily to the benefit of the companies whose shares are traded on them and the savers whose money is invested, rather than the interests of the asset management industry.
Most of those who made submissions to Prof Kay's review - including many from within the financial services sector - felt that the fundamental objectives of rewarding savers through the activities of high-performing companies "could be more effectively achieved".
Prof Kay said that the principle of "market efficiency" should not focus on the smooth functioning of markets for the benefit of intermediaries, but on whether they allow companies to make long-term decisions and give savers the ability to make financial plans.
"Our view is that every regulatory action must be justified by its contribution to efficiency in that sense," he wrote. "The performance of equity markets should therefore be assessed by their effectiveness in allowing companies to make long term decisions appropriate to their business and in allowing savers to make financial plans appropriate to their objectives."
The interim report quoted the concerns of major investors that the regulatory structures of the markets favour the financial services industry over its customers. The Association of Chartered Certified Accountants told Prof Kay that "it is sometimes forgotten that equity markets exist not solely to enrich speculators, market makers and intermediaries".
Prof Kay also reported the concerns of businesses that the asset management companies which buy and sell an increasing proportion of shares are failing to act as "stewards" of the firms whose equity they hold.
Mr Cable said: "One of the big overriding themes in economic policy has to be generating - in both equity markets and corporate Britain generally - a belief in the importance of the long-term perspective. I'm very grateful to Professor Kay for the work he has done so far and I look forward to receiving his final recommendations in the summer."