Crisis Creates Opportunity
I n the mid-1960s, Wall Street was booming, part of a prolonged expansion as institutional investors moved into the markets. The upswing caught Wall Street off guard and brought on the realization that the current way of doing things—physically delivering security certificates to customers—was outdated and insufficient to meet the volume. The New York Stock Exchange (NYSE), in a report to Congress in 1971, admitted that antiquated or otherwise unsatisfactory securities handling methods prevailed at virtually every type of financial organization involved in the various phases of the securities issuance and transfer process. Quick fixes proved fruitless, mainly “hasty efforts to apply sophisticated computer technology to operations problems which had not been adequately analyzed in advance,” the NYSE reported to Congress.
The trading floor of the New York Stock Exchange (NYSE) in the 1960s, when physically delivering security certificates to customers was the only way settlement of trades occurred—until the Central Certificate Service, the NYSE’s own internal computerized bookkeeping technology, was developed. (Photo courtesy of Library of Congress Prints and Photographs Division Washington, D.C. 20540 USA. Collection: U.S. News & World Report magazine photograph collection. Reproduction Number: LC-DIG-ppmsca-56735.)
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