[발췌] The Great Unfixing (2010)

출처: http://www.thinkadvisor.com/2010/05/01/the-great-unfixing. May 1, 2010

다른 자료:

• CF. When and why did brokerages switch from fixed commissions to negotiated ones? (Investopedia) 
• CF. http://www.wikinvest.com/wiki/May_Day_(Brokerage_Deregulation) 
• CF. THE SECURITIES ACTS AMENDMENTS OF 1975, SELF-REGULATION AND THE NATIONAL MARKET SYSTEM (U.S. SEC, Nov 18, 1975)

※ 발췌 (excerpt):

35 years ago, fixed commissions ended and a new Wall Street was born.

It was known as "May Day" or "Mayday," the latter spelling suggesting the distress with which it was regarded in some financial circles. On May 1, 1975, the era of fixed commissions for stock transactions ended. A comfortable albeit constraining arrangement gave way to heightened competition that would transform the brokerage industry─indeed, ultimately remaking it such that the very term "broker" would seem old-school.

The old era lasted just shy of 183 years. It began with the Buttonwood Agreement of May 17, 1792 in which 24 brokers, reportedly meeting under a Wall Street buttonwood tree, resolved to trade on a commission basis and not to allow any commissions below a certain level. This loosely organized group evolved into the New York Stock Exchange.

The Buttonwood Agreement may have helped America's nascent financial markets survive. For one thing, it gave confidence that dealing in securities was a plausible way to make income. Plus, by showing that brokers could regulate themselves, it may have forestalled a political crackdown on the newfangleed activity of stock trading.

But over time, fixed commissions, enshrined not only in New York but at exchanges throughout the country, also put limits on the stock market. The high costs of trading discouraged broad public participation, and the clubby arrangements among exchange members created a dubious environment for innovation in financial markets.

( ... ... ) In 1971, under Chairman Hamer H. Budge, the SEC took a relatively modest step in requiring negotiated commissions on transactions larger than $500,000.

The NYSE in 1972 hired former SEC commissioner James Needham to be it new chairman. Although as a regulator he had been amenable to moving toward unfixed commissions, as NYSE chairman he saw his job as making sure such movement didn't go too far or fast, warning he would fight such measures "on the courthouse steps."

But the momentum was on the other side. Congressman John Moss held hearings on fixed commissions and introduced a bill that would eliminate them.  ( ... )In 1972, the agency [SEC] lowered the upper limit on fixed-commission transactions to $300,000.

Ray Garret [... in 1973 ... ] pressed for a complete shift to negotiated commissions. The agency ordered an end to all fixed rates as of May 1, 1975. As an interim step, in April 1974, commission on orders under $2,000 were unfixed.

Fallout

May Day is often described as a "deregulation," and it was that. But it was a curious kind of deregulation, eliminating private-sector rules rather than government ones. In any event, ( ... ... )