THE SECURITIES MARKETS

The structure and operation of today's financial markets largely reflect relatively recent advances in electronic information technology and its applications. The ability of market participants to communicate and store vast amounts of information at very high speeds has irreversibly transformed the landscape of these markets. The age of the global, twenty-four-hour-day market is at hand.' Significantly, these developments seem to be unending; change continues at an accelerating pace. This article reflects on the implications of these developments for those who deal with commercial law, in particular the laws relating to the transfer and pledge of investment securities within the structure of modern securities markets. 2 The principal goal of this article is to identify and illuminate the attributes of electronic information technology applications in the context of commercial law. By explicitly drawing attention to the relevant attributes of technology, this taxonomy may assist those who are called upon to create (legislatively, judicially, and administratively), administer, and interpret commercial law. Consideration of securities market clearing and settlement provides a particularly useful and timely context within which to examine technology and commercial law. Clearance and settlement comprise the process whereby securities market participants consummate their agreements to buy and sell securities (trades). The buyer pays the seller, and the seller "delivers" (transfers a property interest in) the securities. The securities markets are highly automated, relying heavily on information technology, and systems for