While the Commission has spent the past year addressing the structure of the U.S. securities markets, one of the more difficult issues that remains is the manner in which market information is disseminated. While the Commission created a Market Information Advisory Committee last year to examine these issues, I think that the Commission's consideration of recent proposals has provided some guidance on where the debate is headed. Before I begin, I need to mention that the views I express today are mine alone, and are not meant to reflect the views of the SEC or its staff. The debate over market information may be less familiar to some of you who spend the majority of your time structuring capital raising transactions. Market information, or market data, is the price and size of offers to purchase or sell securities, and completed transactions that have occurred on an exchange, market maker, or electronic trading system.
Market information is the life-blood of our markets.
The need for it was crucial to the formation of stock exchanges. Until the 1970s, price discovery generally was performed on the floors of the various stock exchanges, where brokers met to buy and sell securities. By the 1970s, however, it was clear that the markets were nearing a crisis. Fixed commissions and barriers to market access worked against the development of a fair and efficient market system. Dominant markets withheld pricing data, and used it to their competitive advantage.