Technology takes to securities trading

The Internet and other communications technologies are changing the way financial markets operate. Some markets will be full-service marketplaces, others will provide only certain services, and others will be ill-defined-such as smart agents on the Internet. Technology will allow orders to be routed to the most appropriate market. So the market of the future is likely to be a glass box of markets with different but transparent trading opportunities accessible through technology. The result will be seamless electronic trading, around the clock and around the world, with investors buying and selling individual stocks, currencies, commodities and mixed portfolios. Trades will be based on a variety of parameters. Liquidity will be provided primarily by investors, as opposed to intermediaries. Settlement will occur in real time. Multiple types of competing markets and market centers will provide multiple services. Transaction costs will fall to competitive levels on a worldwide basis. Technology will help us achieve this goal, but foresight and thoughtful proactive regulation are also necessary. Let us hope that, if the technical community keeps providing the former, the government will try hard to provide the latter.