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. Last Updated: 07/27/2016

SEC Approves Cyberspace Stock Trading System

NEW YORK -- The Securities and Exchange Commission has given its green light to an Internet-based stock trading system launched earlier this month by a small beer marketer based in New York.


Spring Street Brewing Co., which sells Wit! beer, said the SEC required it to make a number of modifications to its first-of-a-kind cyberspace stock trading bulletin board. The service was suspended last week in response to an informal request for information from the commission.


The system, which matches investors wishing to sell their Spring Street stock with potential buyers on a World Wide Web site, will resume once specified changes are implemented.


Those changes include the use of an independent outside agent -- such as a bank -- to ensure careful handling of investors' funds, the publication of certain warnings on its Internet materials to prevent any investor confusion about the role of the trading system, and the disclosure of a complete transaction history showing the price and number of shares for each recent transaction.


Spring Street agreed to make a formal request for SEC approval of its systems within the next few weeks and to allow for future commission oversight.


The fate of Spring Street's novel trading system has generated interest on Wall Street and among small businesses.


Academics view it as an important test of the SEC's willingness to let companies use new technology to tap financial markets.