Fairer Trading Online

Protection for individuals who buy and sell securities online needs further strengthening. That's the sound conclusion reached by the General Accounting Office (GAO) in a recent report.

With online trading exceeding a million transactions a day, the risks involved in this commerce can be more clearly spelled out by brokers and dealers online, said the GAO. That includes privacy, spelling out margin and trading risks - and how and why delays in online trading systems occur.

Although the market has been in a downturn, the number of online trading accounts still is rising, jumping from 8.6 million such accounts in early 1999 to 19.3 million by the end of last year, according to J.P. Morgan.

The single biggest complaint of online investors to the Securities and Exchange Commission (SEC) has been "failure or delays in processing online orders. In the world of the day trader, and the nanosecond responses Americans have come to expect from the Internet, that can mean a big dollar losses. New SEC rules effective this year should help address that concern.

Most important, the SEC should require online brokers to disclose trading risks online. Those who sell stocks and bonds on the Internet ought to be happy to comply.

It's in their interest as businesspeople, as well as the stock-trading public's.