December 8, 2010
On page 41 of the concept release it is asked "what standards should the commission apply in assessing the fairness of the equity markets"? A reasonable question however the example that follows seems most disturbing "is it unfair for market participants to obtain a competitive advantage by investing in technology and human resources that enable them to trade more effectively and profitably than others"?
How can this be a legitimate concern? If the question was phrased "should a person who takes the risk to invest in infrastructure donate the rewards to his competitors?" no one would give this question a second thought. Passing any kind of regulation such as the one proposed destroys the entrepreneurial spirit and will cause massive disinterest in market innovation. Yes some people are investing in better technologies why should they not benefit from this investment? If the markets were all completely government controlled and no one was able to profit by obtaining competitive advantages then how can you possibly believe that Americans live in a free market society. People who take the risk in the financial industry to invest in new ideas and better resources should reap the benefits in the same manner any other business might. Otherwise I find it impossible to consider the markets anything close to "free". Competitive advantages is not unfair, its capitalism at its best and is the core fiber of what the american markets should be all about.