Canadian Securities Course - Page 1, Paragraph 1 - Know your client!
It's been over 18 years since I took the CSC, but I remember well the emphasis put on knowing your client. This perforce means that you know if he is a true client or not. To this management's credit, they tried to bring in a rule prohibiting 'non-member professional accounts' from abusing the client priority rule, but so far have been stymied by the upstairs types. I will continue to press to have this passed. It disgusts me to listen to people tap-dance around this issue...it is a straight up-or-down ethical issue. The argument that anyone paying commission, even if it's .01/contract, is a client is specious. My clearing fees are much higher than that, so should I be considered a client of my clearing firm? I think not.
I would like to reiterate that I am no Luddite when it comes to technology and automation. As early as 1985 we pleaded with the exchange to develop an automated book to replace the truly archaic paper system we have now, but all the exchange's resources were pointed towards the equity side. We need to automate some processes, namely order entry and trade reporting, but it is vital to keep humans involved in an auction. Just look at the embarassment yesterday when for whatever technical glitch the TSE couldn't provide trading in NTL until 3:15. The TSE should have a better fall-back provision than sending orders to the ME or NYSE.
CNN Business news just came on with news of Hong Kong down 10% after several days of lesser declines. This is bound to catch up with the rest of the world's markets. Everyone thinks that the ten-year anniversary of the crash has come and gone so all's well. Again, I think not. People say things are different now, and they are...but just have a look at P/E ratios and the dividend payout rate. Crash II coming (IMHO).
Happy trading.
Porter |
