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September 22, 2005

Quest for Unity: STA's new chairman wants unity, but recognizes it is, at times, unachievable

By Gregory Bresiger

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  • Quest for Unity: STA's new chairman wants unity, but recognizes it is, at times, unachievable

Walking a tightrope at the STA. Bill Yancey has been a trading industry activist for more than two decades. Now he faces several challenges in his position at the STA.

Can William "Bill" Yancey square the circle? Can he persuade ECN officials to work with market makers even though their interests often clash? Can he induce officials of upstart electronic markets to cooperate with traditional auction markets? Can he get the buyside and the sellside to join hands?

Yancey, a beloved trading industry veteran who will formally become the next Security Traders Association (STA) chairman in January, wants unity in the trading industry, an industry with plenty of conflicts. Yancey last month left market maker Automated Trading Desk Brokerage Services for Penson Financial Services. He wants the STA, an organization to which he has devoted more than 20 years, to become the voice of trading authority.

"When an issue comes to bear on the trading community, I want Washington to automatically think of the Security Traders Association," Yancey said.

The STA matters, he argued, because it can bring together, "the voices of all market participants. That's whether that person is a trader on an over-the-counter trading desk, someone on the floor of an exchange or at a buyside or a sellside firm," according to Yancey.

That's easier said than done.

So the most important goal of his one-year term as STA chairman, he added, is to create "a brand identity for the STA." This will lead regulators, traders and academics to automatically turn to the STA for facts and figures, even if some of the members are sometimes philosophically divided, he said.

"It means elected officials or the SEC look to us for white papers or comment letters that serve to shape policy," Yancey said. But to do that, Yancey will have to do something that has been difficult for any STA leader to achieve-bring consensus to its organization, which has a diverse membership.

"A Blessing and a Curse"

Consensus may be well nigh impossible for a group that faces difficult market structure issues such as the role of specialists and the evolution of auction markets. Unity on some issues, Yancey conceded, may not be possible.

"The STA wants to be the industry voice, but there is no way that the STA, because of its broad based constituencies, can create complete unity," Yancey said.

"We have very different groups in the STA. This is both a blessing and a curse," added John Giesea, president and CEO of the STA, who praised Yancey for his work organizing annual STA conferences. STA has about 20 percent fewer members. Giesea said. He said that the organization once had a membership of some 7,500, at the height of the bull market, but it now has lost about 1,500 over the past five years. It is in the process of surveying its membership, trying to determine how various constituencies break out. Giesea said the STA has members from throughout the trading community, including floor and upstairs brokers, buyside and sellside traders, sales traders, market makers as well as a smattering of options traders and ECN officials, among others.