| Description |
The disastrous years following the Stock Market Crash of 1929 led to a series of reforms by President Roosevelt to stabilize the failing economy. The passing of the New Deal laws coupled with more recent laws passed by President Bush and President Obama have led to extensive regulation of the financial industry. Publiclytraded companies must register with the SEC and provide material information to the investing public. To do so, companies collectively spend billions of dollars on lawyers and accountants to adequately provide the information required by the SEC. This requires significant time and effort on behalf of the companies, which takes away from their ability to generate more revenue. Although these regulations are crucially put in place to increase transparency and to prevent foul play, they have become too overreaching with their numerous registrations and accounting requirements. Companies produce annual and quarterly materials for the knowledge of their investors; however, these reports have become painfully long that it is difficult to read the reports of all the companies. The current system governing the securities industry is complex, costly, and inefficient. This raises the question of how it could be improved. To answer this underlying question, one must first understand the historical needs to pass and establish the current securities laws and the issues that arose from their enactments. Next, it is important to compare the system put in place by the United States government to those of other G8 countries in an attempt to find possible solutions that may work for the United States. Finally, one must identify the role technology will play in the future of securities ownership. |
