Inter-regional clearance of securities -- 1980, Horse and buggy or jet age?;

              Inter-Regional Clearance of Securities —1980 Horse and Buggy or Jet Age?
by FRANK H. SPEARMAN III Partner, Los Angeles Office
Presented before the Association of Investment House Cashiers, Los Angeles — March 1970
THE BACK OFFICES of West Coast investment houses have gradually emerged from the welter of paper work that devastated the industry during 1968 and 1969. To a great degree, progress in controlling the pa­per
work has been made because the volume of trading has receded from the days when twenty million shares a day were traded on the New York Stock Exchange. Forward-looking operations managers should now raise the question. How are we to avoid another paper-work snarl if volume returns to its former levels again? As we enter the new decade of the '70s, it may now be appropriate to consider where the back-office half of the industry may be when we finish this decade and enter the decade of the '80s.
CRITICAL OPERATIONAL PROBLEMS
To look for the possibilities for significant improvement in the next ten years in the operational aspects of the brokerage industry, perhaps we should examine briefly the more critical problems facing operations managers on the West Coast today. Some of these problems are ge­ographic,
others are a result of custom, past and present, rules and regu­lations
of various regulatory bodies, and the relationships of West Coast firms to other members of the industry. As I see them, the essential prob­lems
today are:
• Time/value differences arising from geographic distance from New York. The value of securities in transit must be financed, usually by the delivering broker.
• Many securities actively traded on the West Coast do not transfer locally. Securities not in good form for delivery must be financed while in transfer. Delay in delivery is compounded by time re­quired
for distant transfers.
• Cost of moving securities east/west and west/east places West
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