Brokerage

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. Speaking before attendees at this year's national convention for the Security Traders Association, he 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.

State Street Corp.'s deal to purchase Pulse Trading offers the Boston-based bank the ability to leverage its huge transition management business through Pulse's dark pool, BlockCross, according to industry observers. With the addition of BlockCross, they say, State Street Brokerage would be better able to attract more block-size liquidity from money managers looking to trade anonymously and in size, giving the broker both sides of a trade.

Odd lots-which aren't reported to the consolidated tape-have grown as a percentage of shares traded and could now make up as much as 20 percent of market volume. That's according to a recent paper by Cornell University's Professor Maureen O'Hara, together with Chen Yao and Mao Ye of the University of Illinois.

Independent research is taking on a bigger role at Bloomberg Tradebook. The agency brokerage has nearly doubled the number of "indie" research providers it offers to institutional clients.

Fewer is better. That's the message brokers have been hearing from clients over the last year, as buyside traders have reduced the number of algorithms on their desktops.

The battle between the exchanges over the electronic trading of complex orders is heating up. NYSE Amex Options is reporting the number of contracts traded on its complex order book has shot up dramatically since the beginning of the year, positioning the exchange as a contender in what had been a three-legged race.

Making sure brokers are in compliance with the proposed Volcker Rule is not going to be easy, according to an official with the Financial Industry Regulatory Authority.

The Securities and Exchange Commission is considering rules that could limit trading by market makers during topsy-turvy markets. Speaking at an industry conference last month, David Shillman, an associate director in the SEC's Division of Trading and Markets, told attendees the regulator was mulling the imposition of "negative obligations" on dealers in certain circumstances.

Exchanges and the Financial Industry Regulatory Authority, under federal guidance, have proposed updated marketwide circuit-breaker parameters.

Recent rule changes by the exchanges operated by NYSE Euronext have some on the buyside worried about front-running by their brokers. In September, the New York Stock Exchange, NYSE Amex, and NYSE Arca all changed their rules that prohibit trading ahead, or front-running, to mirror those of the Financial Industry Regulatory Authority.