Cboe Advocates Equity Market Structure Reform
Cboe’s Market Policy and Government Affairs (MPGA) team, which outlines Cboe’s perspective on areas for increased efficiency, and advocates for creating greater transparency and investor choice by modernizing certain rules and regulations to level the playing field between on and off exchange trading venues.
The paper outlines five key recommendations, highlighting current rules and regulations in the U.S. equities market that are outdated and need to be updated to fully align with modern markets:
- Modest Tick Size Reform – A more granular minimum increment should be established for a subset of national market system stocks in order to enhance and support price discovery and competition to the benefit of all investors.
- Enhance Best Execution – In connection with any tick size reform, the duty of best execution should be reviewed and potentially clarified in order to increase transparency and consistency for investors.
- Limit Order Protections – Limit order display requirements should be revisited to better reflect today’s stock prices, which enhance protection of investors’ limit orders, increase transparency and bolster price formation.
- Improve Execution Quality Reports – The publication of accessible and targeted execution quality information by broker-dealers should be pursued to further transparency and choice for investors.
- Shorten the Settlement Cycle – The settlement cycle should be shortened from T+2 to T+1.
With Eleanor Beasley, Head of EMEA Equity Market Structure & Strategic Partnerships, Goldman Sachs, & Emily Bi...
Implementation in 2024 will allow time for firms to assess changes they need to undertake.
The reforms address recommendations from the UK Listing Review and the Kalifa Review of UK FinTech.
With Mehmet Kinak, Global Head of Systematic Trading and Market Structure, T. Rowe Price
2021 is set to break capital raising records.