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When was the last “Air Raid”? (Or: Why wait to eliminate the Order Protection Rule?)

Traders Magazine Online News, March 28, 2017

David Weisberger

When was the last “Air Raid”? (Or: Why wait to eliminate the Order Protection Rule?)

It has often been said that one of the greatest impediments to innovation and positive change is the expression “It has always been done this way.”    Such thinking is pernicious, as people assume that “this way” must be correct and that change must imply risk, particularly when the people involved either forget or ignore WHY things are done that way…

David Weisberger

To illustrate, consider the following story told to creativity expert Michael Michalko:

A quality management consultant was hired by a small English manufacturing company to advise them on improving general operating efficiency. The company produced a report which dealt with various aspects of productivity. At the top-right corner of one form, there was a small box. The consultant noted that the figure ‘0’ had been written in every such report for the past year. On questioning the members of the staff who completed the report, they told him that they always put a zero in that box, and when he asked them why they told him they were told do so by their supervisor. The supervisor told him he guessed it had to do with accidents but wasn’t sure. It had always been “0” for the twenty-five years he had been there, so he continued the practice. It, too, was something he was told to do by his former supervisor.

The consultant could find no one in the company who could tell him what the box represented. Intrigued, he went to the warehouse where the company kept its archives to see what he could discover about the form. The company was founded in 1937 and the records were preserved all the way back to 1940. He found the old reports, he saw that the zero return had continued uninterrupted for as far back as the records extended. Eventually, he found the box that catalogued all the originals of the forms the company had used during its history dating back to 1940. In it, he found the original report which was created in 1941, in pristine condition. In the top right corner was the mysterious box, with the heading clearly shown …… ‘Number of Air Raids Today.’  Over time, the heading disappeared but the box remained.[1]

This tendency has impacted the current debate over Regulation NMS.  While Reg NMS did usher in a wave of technological innovation, it is important to review the historical context, which clearly shows that, at a minimum the Order Protection Rule (OPR) and ban on locked markets are no longer needed.

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