Overview

Over the past few decades, we have seen remarkable technological progress and innovation in our securities markets coupled with substantial regulatory reform. Now, some of these advances and reforms, including decimalization, have brought considerable rewards for individual investors by narrowing spreads and increasing liquidity. Most trades today can happen within fractions of a second, providing good prices and counterparties for those seeking to buy equities around the world. At the same time, we have seen increased volatility and periodic dislocation, such as flash crashes, events which do little to engender confidence and, indeed, may hinder investment in the stock market, adversely affecting the broader economy, particularly as it affects small cap stocks. Gains in liquidity, for most folks on the street are seen as the holy grail, but we have to ask ourselves at some point, at what price this increased liquidity, and does sometimes simply progress and technological innovation bear other costs that need to be examined.