Regulating for the future: Securities regulation in an automated environment
| Pages | 340-345 |
| DOI | https://doi.org/10.1108/eb024944 |
| Published date | 01 April 1997 |
| Date | 01 April 1997 |
| Author | Kristen N. Geyer |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 5 Number 4
Regulating
for
the future: Securities
regulation
in an
automated environment
Kristen
N.
Geyer
Received: 28th
July,
1997
Division
of
Market Regulation, US Securities and Exchange Commission, Washington DC 20549;
tel:
(202) 942 0799; fax: (202) 942 9643.
Kristen Geyer
is
Senior Counsel with
the
US Securities
and
Exchange Commis-
sion's Division
of
Market Regulation.
Ms
Geyer
was
previously seconded
to the UK
Securities
and
Investments Board
and has
worked with private
law
firms
in New
York
and Washington,
DC.1
ABSTRACT
Over
the
past
two
decades, technology
has
revolutionised
the way
securities
are
traded.
The high-speed communications, automated
execution
and
borderless
trading made possible
by technological advances pose unique chal-
lenges
for
securities regulators. Regulators
should look carefully
at how
their own regula-
tor structure can
address
these challenges.
INTRODUCTION
Over
the
past
two
decades, technology
has
revolutionised
the way
securities markets
operate. Securities firms have always been
among
the
most aggressive users
of
tech-
nology, from
the use of
tickers
and
tele-
graphs
in the
1930s
to
Internet technology
in
the
1990s.
Now,
computers
are
used
extensively within
the
securities markets
to
route orders, disseminate information
and
to implement complex trading strategies.
Securities transactions that were once slow
and costly have become instantaneous
and
inexpensive with
the
advent
of
computers.
With
the
click
of a
button, orders
can be
entered, executed
and
confirmed within
seconds, both within
and
across national
borders.
It
is
likely that
the
world's markets
would
be
nowhere near their current size,
complexity
or
competitiveness without
the
high-speed communication
and
informa-
tion dissemination made possible
by
com-
puters. Indeed, technology
is
already
integrated into markets throughout
the
world. Markets from
Tel
Aviv
to
Vene-
zuela
are
choosing automated platforms
over floor-based trading,
and
established
markets that have
not
already done
so are
pursuing greater automation
of
trading,
such
as the
London Stock Exchange's
planned automated order book. Alternative
trading systems, also known
as
'electronic
communications networks'
or
'proprietary
trading systems', have become
an
integral
component
in
trading strategies
in the
USA
and,
increasingly,
in
other markets.
Market professionals are also using technol-
ogy
to
spot investment opportunities,
to
communicate with customers,
to
advertise
their services,
to
deliver offering docu-
ments, trade confirmation
and
other docu-
ments
and to
market their
own
internal
trading processes more efficiently.
Markets
and
market participants
are
also
using public networks such
as the
Internet
to facilitate investment. Although this
trend
is
clearly still
in its
infancy, more
than
60
exchanges, from Albania
to
Zagreb, already have home pages
on the
Journal
of
Financial Regulations
and Compliance. Vol.
5,
No.
4,
1997, pp. 340-345
© Henry Stewart Publications,
1358-1988
Page 340
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