Improving America's Securities Markets

Article excerpt

Today, almost everyone is an investor through a pension fund, an Individual Retirement Account or a 401K plan. As well, now that banks aren't the only place for citizens of even modest means to keep their nest eggs, the importance of the stock and bond markets in people's lives has increased dramatically. Hence, it is imperative that the markets be operated by people of certified competence.

To this end, a committee of representatives from securities companies and the major stock and commodity exchanges has proposed subjecting brokers to a competency test after their second, fifth and 10th years on the job. This is a more modest proposal than that of the National Association of Securities Dealers, which would require a test every three years. The markets thought that too burdensome and have offered their more limited proposal.

Though the competence of brokers generally is not being called into question, it is nonetheless obvious that with the frequent changes in both the workings of the markets and the kinds of complex financial instruments being invented at such a rapid pace, not everyone can keep up. …


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