06.09.2016

BlackRock Trading Chief Questions Wisdom of More Stock Markets

This article first appeared in Bloomberg Technology

The U.S. stock market is already spread across dozens of trading venues, so attempts to open more don’t make sense, said Richard Prager, head of trading, liquidity and investments at BlackRock Inc.

“I struggle with the basic concept of how does another venue help?” Prager said in a Bloomberg Television interview Wednesday. “We need to bring the pendulum back.”

He spoke as IEX Group Inc. awaits word from regulators on whether it can open the 13th U.S. stock exchange. Prager declined to comment specifically on IEX, whose quest to make markets more fair was documented in Michael Lewis’s “Flash Boys.”

Despite the shortcomings in today’s stock market, Prager said the bond market should increasingly model itself on it. That includes having more all-to-all venues, or places where all constituents — including investors and brokers — can come together to buy and sell. Currently, much of the market is segregated, with gatekeepers keeping certain groups out.

“I hope they’re looking at the equity market,” Prager said. However, “It’s not going to go there 100 percent.”

BlackRock made a splash in 2014 by arguing that the corporate bond market is “broken.” Earlier Wednesday, a group of investors, though not BlackRock, issued a mission statement documenting how they’d like the bond market to evolve.

 

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