Opening Statement by Rep. Mike Oxley (R-OH).
Re: Finance Subcommittee hearing on Title II of HR 1858 (database protection for real time market data).

Date: June 30, 1999.
Source: House Commerce Committee.

Statement of The Honorable Michael G. Oxley
Subcommittee on Finance & Hazardous Materials Hearing on
H.R. 1858 - Consumer and Investor Access to Information Act of 1999
June 30, 1999

People love to talk about the dramatic ways in which the Internet has transformed the world. It is certainly no exaggeration that the Internet has led to the most significant changes in our securities markets, not only since the invention of the ticker tape, but, indeed, since their creation.

As one of our witnesses here today observes, each day, 1 of every 3 trades is executed on-line. Millions of Americans invest on-line today. And the 4- and 5-year-old kids today who astonish their parents not only with their VCR-programming ability, but also with their ease with a computer and keyboard, will be the on-line investors of tomorrow.

On-line investing has empowered investors and given them greater personal control over their finances. Only a few years ago, information that investors can get today at the click of a mouse was available only to professionals like brokers and institutions. As a result of not only on-line brokerages, but also the development of numerous on-line sites that provide financial information to consumers, average investors have ready access to information that is vital to their financial well-being.

H.R. 1858 is designed to preserve that access. And the central component of the information that investors need is the price of what they are buying or selling - namely stock prices.

In the 105th Congress, this Subcommittee held a hearing to learn more about the implications of the growth of on-line investing. One of the issues that arose from that hearing was, who owns real-time stock prices?

Real-time stock prices are, as one astute commentator who testified before this Subcommittee last year noted, like oxygen to investors. Without access to this information, investors have no ability to make rational economic decisions about whether to buy or sell a security.

Concerns have been raised that investors could be denied access to this information if Congress, or a court, were to say that this information belongs to the stock exchanges or some other entity. After all, stock prices are facts, just like any facts. As one op-ed writer in the Washington Post asked today, should the Major League Baseball Association own the fact that Ted Williams batted .406 in 1941? [With no objection, I would like to insert this article into the record.] Similarly, should a stock exchange own the fact that an investor just sold a stock at 25.2 dollars? (That's after decimalization, of course.)

I don't think we should raise barriers to the free flow of information to the public by creating ownership over facts and information, including stock prices, that are contained in databases. And H.R. 1858 does not do that.
At the same time, the exchanges and others that are required by the Federal securities laws to provide this information to the public should be protected from hackers and pirates who would undermine the integrity and the value of the databases they publish.

H.R. 1858 strikes the right balance between preserving investor access to market information and protecting the exchanges and others that disseminate that information.

It provides a new federal remedy for exchanges and other disseminators of market data to stop misappropriation of the databases they publish.

And it preserves all the remedies that currently exist under contract law - so that exchanges and market participants remain free to structure their business relations as they deem most mutually beneficial, subject to the oversight of the Securities and Exchange Commission.

This legislation provides an important tool to protect not only the quality and timeliness of market information, but also the access by investors everywhere to that information.

I commend the Full Committee Chairman, Tom Bliley, for his leadership in introducing this bipartisan legislation. I also thank my colleagues on both sides of the aisle, including Ranking Member Dingell, my friend, the Ranking Member of the Subcommittee, Ed Towns, the Vice Chairman of the Subcommittee, Billy Tauzin, Roy Blunt, and Ed Markey for their contribution and cosponsorship of this legislation.

I am pleased that this legislation enjoys the support of the Securities and Exchange Commission, as well as Consumers Union, whose letter of endorsement of H.R. 1858, sent yesterday to me and Chairman Bliley, I would like to include in the record, as well as numerous electronic brokerages and financial information services, and Internet companies.

We are fortunate to have several of these esteemed supporters of this legislation here before us today.

I would like to welcome Ms. Annette Nazareth, the Director of the Securities and Exchange Commission's Division of Market Regulation, who will be our first witness. I also welcome and thank our second panel of witnesses, including representatives of DLJdirect, Ameritrade, Bloomberg, Charles Schwab & Co., the National Association of Securities Dealers, and the New York Stock Exchange, for joining us today as the Subcommittee considers the Consumer and Investor Access to Information Act of 1999.