SIFMA Executive Applauds SEC Equity Market Structure Review, Restates Reform Recommendations
At the SIFMA Equity Market Structure Conference, SIFMA Executive Vice President Randy Snook restated the Association's recommendations to the SEC regarding the future of Regulation NMS. Noting that equity markets have "evolved considerably" since the adoption of Reg. NMS, Mr. Snook praised (i) SEC Acting Chair Michael Piwowar for soliciting feedback on Reg. NMS, and (ii) the SEC itself for beginning a thorough review of equity market structure. Mr. Snook outlined SIFMA's recommendations:
-
Evaluate the Order Protection Rule (Rule 611 under Regulation NMS), which requires all trading centers to honor the best displayed price by a national securities exchange, in order to determine whether the rule creates unnecessary market risk as a result of increased complexity in the markets;
-
Address the cap on access fees and potential conflicts of interest that might be caused by such fees;
-
Consider improvements to the public market data feed, including (i) adding depth of book information and (ii) allowing competition among data consolidators; and
-
Assess the role of national securities exchanges as regulators by providing broker-dealers and asset managers with representation in the governance of NMS plans.
However, Mr. Snook also urged the SEC to exercise caution:
"[A]ny changes to Reg. NMS should maintain the benefits that investors and market participants have received – in particular the automation of markets and the improved trading experience for individual investors."
Related Articles
-
University of Houston Finance Professor Craig Pirrong applauded the SEC's new Special Study of the Securities Market and questioned whether the SEC Order Protection Rule is necessary to sustain a competitive equity trading marketplace.
-
The SEC Equity Market Structure Advisory Committee ("EMSAC") will consider subcommittee updates on the Regulation NMS "Order Protection Rule" and on SRO rule-based limitations of liability.
-
SEC Acting Chair Michael Piwowar encouraged the undertaking of a "Special Study" of the securities markets by the Columbia Law School Capital Markets Program. The Study will offer recommendations for financial market regulatory reform.
-
The SEC renewed the charter of the Equity Market Structure Advisory Committee. The Committee approved recommendations on market quality and order handling disclosure.
-
Delta Strategy Group summarized industry member and regulator comments made at a recent Equity Market Structure Advisory Committee ("EMSAC") meeting. The meeting focused on recommendations proposed by EMSAC's subcommittees on Market Quality and Customer Issues.
-
The SEC Equity Market Structure Advisory Committee considered recommendations made by a subcommittee that examined investor disclosures, trading halts and trading reopenings.
-
The SEC solicited comments on a proposed de minimis interpretation of the definition of "automated quotation" under Reg. NMS.