SEC Releases Views on Broker Electronic Communications with Investors

Article excerpt

WASHINGTON -- The Securities and Exchange Commission has taken another step to make it easier for brokers to communicate with their customers via computer.

The agency late last week released a legal road map on a range of electronic communications issues, which allow brokers to send trade confirmations to customers via the Internet or other computer systems without mailing a paper backup copy.

"I think it's very significant," said Andrew Klein, founder of New York-based Wit Capital Corp., which is building an Internet-based investment bank. "What strikes me as new and important is the SEC has now gone a further step in accepting ...digital transmissions."

The new SEC guidelines, known as an "interpretive release," come as Wall Street firms move on several fronts to incorporate the Internet and other modern technology in the investment business.

"It's the hot issue, what everybody is focusing on now and looking for guidance," said Mark Egert, assistant general counsel for the Securities Industry Association, the industry's main trade group.

In recent months, the SEC has made a series of statements that clarify what sort of investment business can be conducted over the Internet or other computer systems.

Via home computer, an investor now can receive a prospectus for a stock offering; review price quotes for securities or mutual funds, although sometimes they're provided at a 15-minute lag; view advertising for investment opportunities; and receive account statements or a listing of your account's holdings. …