Post of the Day
April 24, 2000

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Fool on the Hill

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Subject:  Proposed Regulation FD: File No. S7-31-99
Author:  JanHarkness

[The following is related to the Fool article "Wall Street Opposes Level Playing Field" by By Bill Barker on April 20, 2000. Bill describes how hundreds of people, many of them Fool readers, have written the SEC to comment on a proposed rule to level the playing field regarding company disclosure of information. This is one of those letters.]

From: Jan Harkness <>
To: <>
Subject: Proposed Regulation FD: File No. S7-31-99
Date: Friday, April 21, 2000 10:09 AM

As an institutional buyside investor, and former president of the Seattle chapter of the Security Traders Association, I am eager to comment on your consideration of the referenced regulatory proposal. The SEC has made laudable progress in promoting more fairness in the financial industry. I see your consideration of this proposal as another indication of this wise direction and consideration of protocol as the markets continue to evolve.

We have entered a phase in our markets when the linkage between research and execution services of a brokerage are less important. More trading venues and options are available to investors, both institutional and retail, which allows greater anonymity and control of order flow to the buyside. These two very separate and distinct functions of the sell side are wisely being considered more and more on their own merits. Research that adds value will always be sought and gladly paid for because of the contribution to success of the funds manager. Without a doubt, many well-educated, intelligent individuals fill the roles as analysts and bring a high degree of professionalism to their responsibilities. Their ability to thoroughly analyze investment alternatives is aided by their concentration of the most scarce resource, time, to a more singular focus.

Should this justify their privilege to obtain information more exclusively than those who have fiduciary responsibilities for billions of dollars as managers of clients' funds? Or more privilege than those in the public who have the will and initiative to do their own research, and whose interest could never be matched by anyone who hasn't the personal stake in the good stewardship of those assets. I think not. What advantage to the efficiency and stability of our markets is added by that exclusivity?

In a country built on equal opportunity and the reward of excellence and innovation, I think our national and individual interests are best served by offering the best and most knowledge to all who would utilize it and compete for more perfect understanding. To artificially benefit one group over another, especially to augment possible financial gain, is in conflict with the directions that have created one of the most viable economic industries through all historical time.

The role of analysts, even without special privilege and access to information, will remain valuable to the financial community. To those who offer excellence over their peers, financial rewards will always be available. For excellence to be recognized, sought and paid for is foundational in democracy and the primary basis for its success. Professional athletes achieve their compensation levels through extraordinary ability, hard work, and persistence, not because some members of society are denied the opportunity to use a basketball, football, or whatever.

As we continue to evolve in this highly exciting era of global economic growth, let us insure that all minds, all contributions are nurtured and encouraged, and privileges not granted to stymie healthy competitive progress.


Jan Harkness

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