Reflections From 2018
by Mike Rask, Hodges Capital & STA 2018 Chairman
Shortly after starting in this business, I recall a conversation with a long-time industry veteran who stated that “the financial services industry is constantly changing and evolving” and further, “try to understand what these changes mean and stay relevant.” For perspective, at the time of this conversation, a young man named Mark Zuckerberg was beginning his freshman year at Harvard, so things that are common today like robust FIX connectivity and the ability to communicate with the masses with just one click were not so common. In fact, average prices were computed with a calculator or if you were advanced, a Lotus 123 or Excel spreadsheet. Our industry has seen tremendous change these past few decades; some technological like highly automated order management systems, others regulatory like the move to decimalization. These changes have benefited the investors we serve but there has been a human toll on individuals employed in our industry and on the companies that employ them.
I have had many conversations this past year about the pace of change in our industry. Although we have been through many changes, it seems to me that the pace has quickened. Much of the change is being driven by the SEC’s new administration led by Chairman Jay Clayton as it appears they have a clear agenda and are moving forward at a quick pace. The recently announced Transaction Fee Pilot will likely be implemented in 2019, which will lead to further changes in how we access the marketplace. The SEC’s interest in market data charges will bring changes in that area, as they have made it clear they don’t believe in a “one size fits all” market. This may result in rules being applied differently based on market cap size, security price or trading volume. The effects of MiFID II are beginning to be felt in the U.S. with many buy-side firms unbundling and increasing their disclosure to clients about research consumption.
These changes and others yet to come mean that this quickened pace of change will likely continue. As I think back to the sound advice that my colleague gave me 20 years ago, it seems just as relevant today as it did then. Understand what the changes mean and stay relevant. So how do we do this? In 2019, I believe that each of us would benefit from broadening our understanding of the dynamics that are at work in our industry. Attend a conference, read industry related material, talk with colleagues about relevant issues and stay current on what our legislators and regulators are contemplating.
Security Traders Association is an impactful force in our industry due to the contributions of many individuals. I would like to recognize those who worked to make 2018 another great year for STA. This includes the 125 people who served on STA’s Women in Finance, Listed Options, Retail Advisory and Market Structure Committees; the 245 individuals who served on STA Affiliate Boards across North America; the 80 organizations who sponsored STA; Williams & Jenson who helped STA have a strong voice in Washington DC; the Financial Information Forum staff; Mark Dowd and his team at Forefront Communications; and the three individuals who handle STA’s day to day operations, Dawn Combs, Kerry Flynn and our President and CEO, Jim Toes. Finally, I would like to also extend a personal “thank you” to five of our STA board members whose terms were up at the end of 2018: Jon Schneider, Jodie Mrotek, Ian Kenny, Fred Mason and Andy Nybo. I enjoyed working with each of you and appreciate your service to STA and to our industry.
In conclusion, it was my honor to serve as your 2018 STA Chairman. I would like to extend a warm welcome to my friend Doug Clark as your 2019 Chairman and to the rest of the 2019 STA Board.