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In this shared blog, David Weisberger says a recent WSJ article is wrong and that traders do need to purchase faster and more comprehensive market data to avoid being fined for violating "Best Execution" obligations.

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Occupy Wall Street Could Lead to More Rules

One outcome of the Occupy Wall Street protest could be additional regulation in the equities markets, according to Dan Mathisson, who heads electronic trading at Credit Suisse's AES group.

Dan Mathisson

Mathisson, speaking Friday before attendees at this year's national convention for the Security Traders Association, said traders need to interact more with politicians to better educate them on how markets operate; otherwise the protestors' complaints about Wall Street would not be counterbalanced and could result in needless regulation.

He said the image of the protestors in the media is a strong one that "can't be taken lightly," as "thousands of kids [are seen] camping out on Wall Street." He called it a successful branding campaign.

One possibility could be a transaction tax, though Mathisson doesn't believe that would happen as long as Republican's can keep control of the House of Representatives. The discussion of a transaction tax has been more heated since the European Commission plans to discuss such a proposal at its November meeting.
 
The good news for U.S. traders would be if Europe moved forward with a transaction tax. Investors would trade more in the U.S., as they would look to avoid the tax. "That would be a good thing for everyone in this room if [Europe does] it by themselves," Mathisson said.

The Occupy Wall Street crowd, Mathisson said, has "created this image that every problem is a Wall Street problem." That then puts pressure on politicians to respond, and politicians then put pressure on the Securities and Exchange Commission to "generate new rules to show they are doing something."

During his presentation, Mathisson used slides to demonstrate that rules banning short sales didn't work: they drove away liquidity and widened bid-ask spreads. One reason for that was that the rules pushed out the long/short strategy, he said.

"Everyone in this room and the whole industry needs to increase their efforts to communicate in Washington," Mathisson said. "And everyone has to get out there and talk to their representatives and senators to make sure they are hearing the other side of this."

 

Read Mathisson's Recent Column on Occupy Wall Street at:

www.http://www.tradersmagazine.com/news/occupy-wall-street-finance-109488-1.html