The Emergence Of On-line Tradi

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information on this industry. As of September 1998, there were 5,591 firms in the industry. The Securities and Exchange Commission (SEC) and the NASD Regulation (NASDR) regulate these firms. "The Nard's responsibilities include establishing rules governing its broker/dealer members' business conduct; setting qualification standards for securities industry professionals: examining members for their financial and operational condition, as well as their compliance with appropriate rules and regulations; investigating alleged violations of securities laws and the NASD's own rules; discipline [these violations]; and responding to inquiries and complaints from investors and members" (nasd.com). The jurisdiction of the NASDR is limited to the NASD members and their investors. The SEC handles matters outside the NASDR jurisdiction. The SEC is an independent quasijudicial regulatory agency that administers the federal securities laws. The two most important of these laws are the ...

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of their services allowed the firms to charge lower commissions. Their previous commissions had to compensate for their research, investment advice, and a larger labor component. As new entrants scrambled into the market, prices dropped significantly. Firms began to unbundle their advisory services from their execution services. This unbundling led to the emergence of the discount broker, which is still popular to this day. These firms can execute trades at a lower price since they have a lower cost. They also can charge their customers on an a la carte basis for more services if the customer is in need in further assistance in making a transaction. Another effect due to ...

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