NYSE changing market structure

March 15, 2016 09:00 AM

New York Stock Exchange

The New York Stock Exchange (NYSE), a subsidiary of Intercontinental Exchange (ICE), recently outlined actions it will prioritize to enhance U.S. equity market structure. NYSE made a number of changes including:

  • Increased the transparency of pre-opening indications, effective Oct. 26, 2015;
  • Widened collars on NYSE Arca’s opening auction, effective Sept. 8, 2015; and
  • Announced the elimination of stop orders beginning Feb. 26, 2016.

NYSE also retained McKinsey & Company to interview various market participants and gather feedback on potential market structure changes. NYSE’s review produced a detailed report outlining changes to protect investors in volatile periods. It identifies five actions that NYSE believes should be taken immediately including: Amending the Limit Up/Limit Down program (LULD) procedures; Eliminating conditions that may preclude price bands from being in immediate effect after a halt; synchronizing Clearly Erroneous Execution (“CEE”) rules and LULD bands across venues; Enacting guardrails and industry best practices around the use of market orders; and increasing coordination of education efforts to ensure that investors better understand market structure features and enhancements.

Longford Capital 

Laura P. Pearl has joined the firm as Managing Director and Chief Financial Officer. Ms. Pearl will be responsible for all accounting, audit, finance, and HR functions, as well as monitoring of investment performance and investor relations.  She also will serve on Longford Capital’s Investment Committee. “Laura has achieved great success throughout her career in the private equity and investment industry; she has the experience and ability to help Longford Capital keep pace with the enormous growth our asset class is experiencing.  We are proud to have Laura as an important member of our management team,” stated Chairman Bill Strong.

CBOE 

The Chicago Board Options Exchange (CBOE) began listing S&P 500® Index (SPX) Wednesday-expiring WeeklysSM options on February 23. The new options, or “Wednesday Weeklys,” generally have the same characteristics as the exchange’s Friday-expiring SPX Weeklys options, with the exception of their listing and expiration dates. Wednesday Weeklys typically are listed on Tuesdays and expire on the Wednesday of the following week.  SPX options continue to be the most actively traded U.S. index option and, in 2015, set a new annual volume record of 236.5 million contracts, with average daily volume (ADV) of 938,620 contracts, an increase of 6% over 2014.

BCA Research

BCA Research, a provider of independent investment research, announced in February that it has partnered with FiscalNote, a technology startup building a revolutionary platform for analyzing government risk, to integrate U.S. policy data and analysis onto BCA’s digital platform, BCA Edge. The collaboration will enable investors to factor today’s complex regulatory landscape into their investment strategies and better understand how individual companies and industries are impacted by legislative actions.

Top Guns

Jennifer McClelland, veteran portfolio manager at RBC Global Asset Management, earned the title of Top Gun Investment Mind of the Year by Brendan Wood International, an independent performance advisor. Brendan Wood announced in February that 61 buy-side investment professionals have been voted Top Guns this year. They were chosen by 265 sell-side professionals casting ballots for the investors they believed to be thought leaders in the industry during the past year. Less than 10% of nominees were named Top Guns. The most common attributes for nominations included managers who:  Ask the right, tough questions, were creative and open to new ideas, had critical minds, were global thinkers, had a diligent approach and analytical process, were disciplined, did not listen to market noise and were forward thinking.

MBU Capital

MBU Capital announced on Feb.10 global availability of its inaugural Global Social Bond, a Socially Responsible Investment (SRI) that leverages crowdfunding to offer participants high/stable returns, combined with profit participation and charitable contributions. The Global Social Bond invests in high-yield property and sustainable developments across the UK focused on affordable housing, community regeneration and high quality accommodation for students and the elderly.

Moscow Exchange

On Feb. 1, Moscow Exchange announced changes to the liquidity support program for its Equity Market to incentivize market-makers and attract new participants. The exchange will remove the minimum average daily volume that market-makers are required to quote to be eligible for remuneration. This will apply to all stocks in the program. The five most liquid stocks will be excluded from the program to boost less liquid securities. Following this, the program will cover 35 stocks. The market-making program was created with the active involvement of market participants.

FinTech Exchange 2016 

Barchart OnDemand will host the 2016 FinTech Exchange 2016 in Chicago on April 21. The program will feature Lightning Round presentations, FinTech Forecasts, two Keynotes plus demonstrations and networking opportunities. Topics will include: Trading software, market data and APIs, FinTech forecasts, artificial intelligence trading technology, binary options, cloud infrastructure, cloud security, Bitcoin, blockchain and more.

Financial Conduct Authority 

The Financial Conduct Authority (FCA) in February fined Achilles Macris £792,900 for failing to be open and co-operative with the Authority. Mr. Macris was Head of CIO International for JPMorgan Chase Bank, N.A. in London. In that role he was responsible for a number of portfolios, including the synthetic credit portfolio, at the time of what became known as the ‘London Whale’ trades.

CFTC  

On Feb. 12 the CFTC issued an Order authorizing National Futures Association (NFA) to be a designee to receive access to data maintained by swap data repositories (SDR). As a condition to the Order, access and use are limited to SDR data that will facilitate NFA’s performance of functions delegated to it by the CFTC and other duties that NFA performs as an RFA. NFA is required to keep all non-public information received through access to SDR data confidential and to refer any requests for data to the CFTC for handling.

About the Author

Editor-in-Chief of Modern Trader, Daniel Collins is a 25-year veteran of the futures industry having worked on the trading floors of both the Chicago Board of Trade and Chicago Mercantile Exchange.