THE SECURITY TRADERS Association has a proud and accomplished 82-year history of providing a voice for our industry in matters of market structure. STA is member-run and its success is collectively ours.Heading into 2017, I will have the honor of chairing this storied association, with its diverse board of governors and network of local affiliate organizations. Our actions will continue to shape and develop a message that is consistent with our guiding principles, interests and values. Over the past eight years I have had the pleasure of being a part of this association’s board and have witnessed, like many of you, great change and evolution in our industry.
Since STA is a reflection of our industry, we as an association have had to evolve as well.
The one constant in how STA conducts its affairs is the association’s leadership with the respect it gives to STA’s history and traditions. The strong drive to build and maintain a reputation for thought leadership within a grass-roots effort distinguishes us. As the year nears a close and we set our eyes on the tasks ahead in 2017, the continued themes of uncertainty and change will undoubtedly play themselves out. With the general election quickly approaching, we must prepare for two radically different outcomes for our industry.
Our challenge today is how we prepare so we can respond to the circumstances. We are presented with yet another opportunity to participate in the regulatory process. Our market structure committee system represents some of the brightest thought leaders (sell side, institutional, retail, regulatory, options) in the industry. It is through their diverse insights that we are able to present opinions that are well vetted. The affiliate structure of STA is unique.
We are different from other associations in that we build off the strengths and involvement of our representative affiliates. Each offers something to the brand. From institutional to retail, alternative trading systems to exchange, when brought together the community of affiliates creates a powerful message and industry identity. STA is well prepared to continue our service to the industry. The knowledge and input of our membership is imperative to lend perspective to comment letters and testimony that help guide regulatory initiatives. I believe no other association is as well prepared with such a wide range of industry participants to understand how efficient markets should operate.
STA has maintained the belief that market structure should be business strategy-neutral and that any changes should be calculated and data-centric. Additionally, we should review and enforce existing rule sets prior to implementing new regulation with its potential for unintended consequences. In 2016, our team continued efforts with a series of Hill meetings with congressional members and staff to discuss governance of Reg NMS Plans. These plans, which include the Consolidated Audit Trail, the Tick Size Pilot and Limit Up/Limit Down, are the means by which the SEC institutes changes to market structure.
STA continues to advocate, in a coordinated effort with other industry associations, for broader industry participation in these plans as we believe investors will be better served, as measured by timeliness of implementation and overall effectiveness of the outcomes. STA has always had a strong presence in Washington, D.C., but it was in 2008 with the release of our white paper, “The STA’s Perspective on U.S. Market Structure,” and our input on the 2010 Concept Release on Equity Market Structure that we began to refocus our efforts with our nation’s legislative and regulatory representatives.
The decision to move our conference to Washington and expand our reach involved an integrated approach with our affiliates. The timing was right and the leadership in place was responsive. A short six years later, our affiliates are more engaged than ever in the process.
As a precursor to our annual Market Structure Conference, a coordinated effort to meet with regulators and congressional representatives and staff builds on this presence. The affiliates are then able to maintain these relationships upon returning to their respective districts. Therefore, we not only have a voice a few times a year in D.C., but now the benefit of continuing our message at home. Our current market structure is the result of efforts by many participants as well as interpretations and comments on various regulatory decisions.
Our industry is, in a sense, a living, breathing ecosystem, one that requires thoughtful care and corrective, but not intrusive, maintenance. Members of the 2017 board of governors look forward to helping you promote order and efficiency in our industry. We have the information, the best and brightest and, most important, the relationships to ensure that we continue to grow in the right direction and support our U.S. market structure as a global benchmark.
I thank you for this honor, and look forward to continuing the efforts of past chairmen in serving you throughout this journey.
Kind Regards, Jon D. Schneider
TABLE OF CONTENTS
When was the last time the functioning of equity markets made news?
A note from incoming Chairman Jon Schneider.
Venue operators face scrutiny into how they conduct business.
Clinton or Trump? In a very unconventional election, the Republican candidate is the one feared by Wall Street.
Market structure advisory group ramps up activity, keeps SEC busy with recommendations.
The industry is on board with the concept but troubled by some details.
Competition, fragmentation, and technology are among primary themes for listed-trading venues.
Assessing the Disclose-and-Review approach to best execution. By Andrew Upward, Weeden
High-frequency trading may not have quite gained acceptance — but at least the pitchforks have been put aside.
But will new technologies complicate the migration?
Has the nearly 20-year-old exchange pricing model outlived its usefulness?
Landmark equity-market ruleset is showing its age; how to update?
Sidelines transactions diminish already-challenged displayed liquidity.
Data fees are ridiculously expensive… at least that’s what the brokers say.