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The Future of the National Market System

Document Type

Article

Language

English (en)

Publication Date

1984

Publication Title

Journal of Corporation Law

Abstract

As part of the 1975 Securities Acts Amendments Congress authorized the Securities and Exchange Commission (SEC) "to facilitate the establishment of a national market system for securities."' Congress intended that the SEC make rapid progress eliminating stock exchange and over-the-counter (OTC) rules which limited competition between the exchanges and OTC market makers. The 1975 Securities Act Amendments specifically directed the SEC to amend "any such rule imposing a burden on competition which does not appear to the Commission to be necessary or appropriate in furtherance of the purposes of this Chapter" within 180 days of the passage of the amendments.' Primarily at issue, were two types of rules which "burden" competition. First, and most important, are stock exchange rules, such as New York Stock Exchange Rule 390, which prevent exchange members from acting as OTC market makers in competition with exchange specialists. Second, are SEC rules which prevent exchange specialists from competing with OTC market makers in the trading of OTC securities." Today, nearly a decade after enactment of the 1975 Securities Acts Amendments, neither type of rule has been substantially amended.' Indeed, as one newspaper editorial aptly stated, the Commission in its most recent releases seems inclined to take "three steps backward" from a competitive market system for every "one step forward."Joel

Keywords

National Market System for Securities, Securities Act Amendments

Publication Citation

Joel Seligman, The Future of the National Market System, 10 J. Corp. L. 79 (1984)

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