Failure to Engage: The Regulation of Proprietary Trading Systems

Abstract

Like much of the world, the securities business has been dramatically affected by the development of computer technology. In an industry where speed and information are the tools of the trade, computer systems that increase traders' ability to gather information and execute faster trades have been welcomed and widely applied. The role of computers has taken a variety of forms. The National Association of Securities Dealers Automated Quotation (NASDAQ) system market, which is currently the second largest volume market in the United States, has no single physical location and is almost exclusively computer-driven. Even the more traditional physical exchanges like the New York Stock Exchange (NYSE) have computerized many of their functions.