Commentary

Brijesh Malkan
Traders Magazine Online News

Solving the Last Mile Problem in Investment Research

One executive takes a forward look at how will the research value proposition change over the short to medium term, and what are the products and strategies managers will turn to?

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Should have had a pilot program a long time ago.

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March 23, 2005

Is Free Riding Good for Markets?

By Gregory Bresiger

Free riding can sometimes be helpful. That's the contention of pension fund TIAA-CREF Investment Management, which argues against the trade-through rule, in a report to the Securities and Exchange Commission. TIAA-CREF agrees that the NYSE plays a dominant role in price discovery, but nevertheless argues that "an ATS such as Liquidnet, ITG's POSIT, or any upstairs market maker can play a major role with regard to quantity discovery."

An ATS's quantity discovery role can have a positive effect on price discovery, according to the report by TIAA-CREF managing director Paul Davis, and professor Robert Schwartz.