Forefront Communications

Markets Media: Day Two ELS Report: Preparing For the Next Big Thing

Alexandra Hamer

Alexandra Hamer

Buy-side heads of equity trading got the chance to hear directly from US Securities and Investments Commission (SEC) on its equity market structure initiatives for 2020 on day two of the Equities Leaders Summit (ELS) 2019 in Miami, which was dominated by big-picture themes like fees for market data, the evolution of regulation, and how traders can capitalize on the steep growth of the $5.57 trillion exchange traded fund (ETF) and exchange traded product (ETP) industry.

Regulators speak

In a morning session Q&A, SEC Commissioner Robert J. Jackson Jr. said there was currently a “healthy back and forth” between the regulator and the industry, adding that he was proud that the SEC remains serious about “holding exchanges to account for pricing decisions” and the transparency of market data.

“For the first time in a long time, people are taking a step back and asking ‘How did we get here? Is this a competitive market structure?’ We at the SEC want to hear about how competitive forces could help this,” he said.

In a later Q&A session led by Capital Markets Strategies’ Ari Burstein, Brett Redfearn, Director of the SEC’s Trading and Markets Division, added that “we do need to look at the competitive forces at play, in light of other dynamics and to what extent we are seeing competition.”

Regulatory topics, such as the Order Protection Rule (OPR) and MiFID II, were also discussed by the SEC staffers during the Miami confab’s second day. When questioned by moderator Tyler Glellasch of the Healthy Markets Association as to whether the OPR remains necessary, Jackson said the question could not be considered “in a vacuum.”

“If you want to have a conversation about it, that’s fine, but then what are we going to do about best execution? If you want to consider that issue, then I’m open minded – happy to go down that road. But the two questions go hand in hand,” he said.

With regards to MiFID II, which is still proving to be a challenge for buy side firms with global operations, Jackson noted there were a lot of lessons learned from the experience.

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