NASAA Statements on Reports on Online Brokerage by the SEC and New York Attorney General

NASAA Praises SEC Commissioner Laura Unger`s Online Brokerage Report

(November 23, 1999) - The following is a statement by NASAA President Bradley Skolnik, Indiana`s Securities Commissioner:

Commissioner Laura Unger deserves praise for taking a reasoned and reasonable approach to the many issues raised by online brokerage and for doing her homework by consulting with a wide variety of people–from executives of online and traditional brokerages to investors and academics.

State securities regulators share many of Commissioner Unger`s concerns about online brokerage. And, like her, we realize how difficult it is to draw a bright regulatory line in such fast-changing areas as online suitability.

In the end, the answers to many of these issues will come from the marketplace, not regulators.

It’s the job of the marketplace to create and innovate. It`s the job of regulators to stay abreast of change and to try to ensure fair dealing, transparency and adequate disclosure. Commissioner Unger and the SEC understand that.

NASAA Commends New York Attorney General for Report on Online Brokerage Technology Issues

The following is a statement by NASAA President Bradley Skolnik, Indiana’s Securities Commissioner:

The North American Securities Administrators Association (NASAA)¹ commends the New York Attorney General`s Office for its thorough and thoughtful report on online brokerage issues, a topic of vital interest to the millions of Americans with online accounts.

The bottomline is this: To succeed in the marketplace, online brokerages, daily if not hourly, must win and keep the trust of investors. They can only do that if their technology and customer service are as good as their advertising. Clever ads and bargain-basement commissions may win a few points of market share in the short term, but it will be a Pyrrhic victory if investors lose faith in an online broker`s reliability or come to doubt their committment to customer service.

Online investors need to know if their broker`s technology and systems are up to snuff. And firms need to level with customers when things go wrong and then do whatever they reasonably can to make things right.

1999 Headlines, Newsroom