Industry participants have weighed in on the Securities and Exchange Commission’s proposals to revamp equity market structure, with many urging the regulator to take an incremental approach, to implement the transparency proposal and drop the controversial auction proposal.
One of the major themes for 2023 is the emphasis on multi-asset trading and the focus on efficiency and scalability across regions and countries. In the past, a trader focused on a single asset class such as equities or bonds, whereas today with the migration to electronic trading, the desk can automate workflows and manage executions across all asset classes.
As we look back on this year, topics such as institutional adoption of digital asset trading, European trading in response to geopolitical risk, and the SEC’s plans to revamp U.S. stock trading rules dominated the headlines. In 2022, we covered those topics and much more including the growing sophistication of AlgoWheel, and the evolution of the buy-side fixed income EMS.
At the Security Traders Association (STA) 89th Annual National Market Structure Conference held in Washington DC in October, brokerage executives reacted to the concept of auctions as well as other ideas on SEC Chair Gary Gensler’s agenda to revamp equity market structure. But the industry’s top wholesalers and brokerage executives speaking at STA emphasized that the stock market is functioning well for retail investors and cautioned against making a litany of changes that could lead to worse results.
It’s not clear whether the stablecoin crisis will cause institutions to scale back their plans for trading and investing in cryptocurrencies or digital securities.
Eyeing this demand for private equity, major broker-dealers, wholesale market makers and global exchanges are striking deals and forming new platforms to bring automation to private securities trading.
If PFOF is potentially curtailed or prohibited, it could impact retail investors that have benefited from commission-free trading as well as the wholesale market-maker model of matching retail orders through internalization.
Despite the boom in ESG investments, ESG metrics are not necessarily consistent across data suppliers and providers may calculate the metrics differently, according to recent industry webinars.
Political shocks such as Brexit and the U.S. election of Donald Trump jolted the foreign exchange markets in 2016, fueling more trading activity for hedge funds and bank trading rooms. Uncertainty around a stronger U.S. dollar and higher interest rates could drive more volatility into 2017. FlexTrade’s Ivy Schmerken investigates.
Senators conducting a hearing on U.S. equity market structure earlier this month vented their frustrations at the slow pace of regulatory change in equity market structure reforms. At the March 3 hearing, lawmakers repeatedly cited delays in developing the consolidated audit trail, or CAT system, for market-wide surveillance, questioning to what extent progress has been made.
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