By editorial@silicon.com, 31 January 2000 00:01
NEWS The chairman of the US Securities and Exchange Commission (SEC) has sounded an alarm on the dangers of Internet trading. In a prepared statement, Arthur Levitt advised investors not to let the immediacy and ease of Web trading prompt them into rash decisions. The SEC chairman - who is chief regulator to the US stock exchanges - confirmed that online share trading is growing fast, and now accounts for a quarter of all US stock transactions. But he said complaints about Web trading have also sharply increased - by 330 per cent in the past year - as frustrated customers find themselves paying for shares at prices significantly higher than quoted on their screens. Online brokers are beginning to see the requirement for tighter controls on electronic trading. Justin Urquhart-Stuart, corporate planning director at Barclays Stockbrokers, said: "Inexperienced investors can find themselves getting into deep water. We're having to find ways to help and protect traders without stopping the trade itself. We might need controls on the portal provider. Or we may have to put limits on the amount people can buy and sell in one trade." Trading services are fearful that unless electronic trading is regulated to some extent, they could find themselves being penalised. Urquhart-Stuart said: "We could have a repeat of 1987 and find a fast market being declared and have the whole thing put on hold. The market could grind to a halt."
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