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Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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May 31, 2003

No Relief on Hill for Market Makers

By Gregory Bresiger

The makers and shakers on Capitol Hill are interested in the woes of the trading industry, but don't expect them to do anything. They're not going to ride to the rescue of the trading industry. That's what one of the key Capitol Hill leaders said at the recent Security Traders Association Congressional Conference in Washington.

"There won't be any legislative relief. The ball is in the court of the SEC. Congress is free to express their opinions, but it's ultimately up to the regulators," according to Congressman Michael Oxley (R-Ohio), the chairman of the House Financial Services Committee. Oxley said that Congress will not intervene in the debate over access fees - which he said doesn't require Congressional action - or about promoting an environment that would improve spreads.

The key lawmaker said that Congress might hold some more market structure hearings later this year, but they will be more to inform lawmakers than to propose any substantive changes.

Asked by Traders Magazine about a possible proposal for increasing the minimum increment, Oxley again said that, "we're not going to legislate that." SEC Commissioner Roel Campos, who also addressed the STA conference, said "we cannot get into the details of whether providing liquidity is, or isn't a successful business."

Campos also warned traders that several trillions of dollars is out of the market because individual investors don't trust the business. "I believe," he said addressing the conference, "that you have to figure out a way to convince people that the system isn't rigged." He also broached the idea of the regulators or lawmakers coming up with one comprehensive proposal designed to solve the problems of market structure.

By the end of the conference, one trading pro summed up the sentiment of lawmakers and regulators who have been hearing about the trading industry's problems: "There's no way in hell they're going to widen spreads."