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September 28, 2006

STA's Education Push

By Gregory Bresiger

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The Security Traders Association (STA) will continue to tress the importance of education for traders this year, explains Lisa Utasi, the next chairwoman of the STA, who officially takes the helm of the trade group January 1.

Education is one area in which traders can certainly find agreement in an organization that represents such a diverse membership. STA includes traders from varying disciplines on both the buyside and sellside, including market makers, upstairs traders, floor brokers and options traders.

Utasi acknowledges that in the past the STA has faced potentially divisive issues, such as the trade-through rule. But now that the debate on trade through is a distant memory, such polarizing issues are fewer and farther between.

Utasi stresses the STA speaks with one voice for the trading industry. And she says the goal of the STA, which represents individual traders and not firms, remains the same: To keep the trading industry together so it can make an effective case when lobbying lawmakers and regulators.

"We want to be available as a resource to legislators and regulators on trading issues," Utasi says. The STA in recent years has found a more responsive ear from regulators and lawmakers on Capitol Hill.


The outgoing chairman of the STA, William Yancey, says sometimes it is not possible for a diverse trade group to have a single position.

In fact, John Giesea, president and chief executive officer of the STA, says the group actually benefits from differences. "Diverse opinion makes us stronger, not weaker," he says.

"But then it is important to explain to the membership the various positions of the buyside and the sellside," Utasi says, "to offer a place for everyone to vet these issues." Utasi also emphasizes that the STA, through its Washington presence, has been able both to lobby effectively for the trading industry and to help involve more professionals.

"We're proud of our annual Washington conference," Utasi says. "At the annual event we offer traders direct contact with regulators and legislators."

For example, at this year's gathering, numerous Securities and Exchange Commission officials turned out. These included SEC Chairman Christopher Cox and Commissioner Annette Nazareth, among others. The leaders of various U.S. House and Senate financial committees usually address the yearly STA conference. This event, STA officials say, is essential for making the trading industry's case on Capitol Hill.

STA officials point with pride to their recent efforts that successfully reduced Section 31 fees. They also believe their lobbying had a dramatic effect on the final outcome of Reg NMS.

Yet this work, they believe, was effective because STA officials were able to demonstrate to lawmakers that they spoke for a significant part of the securities industry. Utasi, in her year of leadership, says she currently doesn't have a "big picture" goal right now beyond the one of continuing education for traders.

Nevertheless, Utasi's membership will face many prickly issues during her one-year term as chairwoman, issues that could divide it just as the trade-through rule split the trading industry the past few years. One controversial subject is internalization.