Although this duty evolves with changes in technology and market structure, the Commission has stated that broker-dealers must carry out regular and rigorous evaluations of execution quality across markets and consider price improvement opportunities. The federal securities laws grant the Commission broad authority over information about securities quotations and transactions. Over the past year, many on-line firms have experienced some type of systems delay or outage that affected the ability of their customers to place orders. Despite the industry's efforts to improve capacity, the Commission's highest number of complaints about on-line trading comes from customers who cannot access their firms' systems. On-line firms vary in their approach to measuring systems capacity and in their disclosure to customers about the risks of systems delays and outages.
Investor education is critical to investor protection.
The decreased personal interaction between an on-line firm and its customers presents interesting challenges to providing investor education. Investors can now access an unprecedented amount of financial information without the guidance of a broker. Educating on-line investors requires an understanding of how these investors trade and the appropriate time and place to provide them with educational information. At the same time, the Internet provides a valuable resource for the Commission to more widely disseminate investor education materials. While on-line discussion forums may educate and provide a sense of community to investors, they also may provide a venue for fraudulent behavior.