SEC plans program to boost trading in smaller stock exchanges

  • The exchange sector was down 10 bps, 20 bps above global equities. YTD the sector is underperforming global equities by 62 bps.

European Securities and Markets Authority may force EU traders to keep written records of face-to-face meeting with clients and to tape their phone calls in a bid to counter market abuse. According to Bloomberg, the rules would apply for meetings that “result or may result” in the “reception and transmission of orders, execution of orders on behalf of clients and dealing on our own account.”

Commodity Futures Trading Commission is debating whether requiring a new registration for HFT traders would provide overseers with better information access collected by exchanges, Bloomberg reported.

Canadian Securities Administrators are considering the impact of scrapping the “maker-taker” pricing model used by stock exchanges that is often linked to HFT trading, the Financial Post reported. According to the regulators, “we are concerned that the payment of rebates is incentivizing behaviors in ways which may have a negative impact on our market.”

Securities Exchange Commission plans to tell stock exchanges to implement a tick-size pilot program that will test ways of boosting trading in smaller exchanges, Bloomberg reported. SEC Trading and Markets Director Stephen Luparello also stated that the trading experiment could be used to test other market-structure changes.

Chicago Mercantile Exchange Chairman and President Terrence Duffy stated that the exchange operator has taken steps to reduce delays in the time between when clients, including high-speed traders, receive market data and when other firms get the same information, the WSJ reported.

CME Clearing Europe will team up with SIX Group’s central-securities depository to offer an integrated collateral-management service to insurance companies operating in Switzerland, pending regulatory approval Bloomberg reported.

London Securities Exchange is a late-stage bidder in the auction for Russell Investments, which Northwestern Mutual Life Insurance officially put on the auction block earlier this year, the WSJ reported. LSE confirmed that it was “evaluating the merits of a potential transaction involving Russell” and that it was engaged in talks with Northwestern Mutual, and should the deal proceed, it would be part founded by an equity raise.

NDAQ’s former CFO Adena Friedman will rejoin the company as president of global corporate and IT solutions, reporting to CEO Robert Greifeld, Reuters reported. Friedman had previously left NDAQ in 2011 and was more recently CFO of private equity firm Carlyle Group LP.

About the Author

Bernardo Mariano brings to ERDesk his experience structuring private deals for the acquisition of mutual exchanges. Prior to joining ERDesk Bernardo worked as a Director for Instinet and later, CEO of Reuters' Bondex. He holds an MS in Economics from University of Illinois and an MIA in Finance from Columbia University. He can be reaced at be reached at mariano@erdesk.com. 

Equity Research Desk (www.erdesk.com) provides fundamental analysis of global capital markets related entities to support the investment process of buy-side analysts at hedge funds and traditional money managers. The company focuses its coverage on securities exchanges, discount brokers, trading platforms, asset managers, financial-related technology companies and intellectual property assets in the US, Europe, Asia, and Latin America.

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