A March 2000 Gallup survey revealed that 61 percent of American adults own shares. At the same time, new technologies make it possible to trade shares more quickly than ever before, often replacing many people with a few computers. Fragmentation occurs whenever a security trades in multiple locations, and traders in one location cannot easily trade with those in the other location. Fragmented markets might deprive some buyers and sellers of the opportunity to trade at the best possible price. Market data consist of securities price and quotation information sold by several consolidation networks on behalf of the stock markets that produce the information.
Regulators fear that the networks selling the data are monopolies that charge excessive prices.
Unfortunately, many regulatory proposals are heavy on centralization and light on innovation. To make matters worse, the perceived problems they seek to solve were often created by existing law and regulation. If regulators genuinely seek to promote investor interests, they will take competition, diversity, and innovation as their watchwords. In the 1970s, Congress and the SEC sought to create a National Market System for stocks by establishing centralized systems for reporting price information and facilitating trade across different equity markets. Unfortunately, the Intermarket Trading System can no longer keep pace with varying speeds of innovation in many different equity markets.