(Bloomberg) — Bats Global Markets Inc. wants to overhaul how a key piece of infrastructure in the U.S. stock market is governed, according to Chief Executive Officer Chris Concannon.
The services known as securities information processors, which distribute the official prices for U.S. stocks listed by the New York Stock Exchange and Nasdaq Stock Market, are overseen by representatives from exchanges and a regulator. Brokers and money managers should also have a voice, the Bats executive said Thursday.
Theres a governance challenge for the SIPs, Concannon said when speaking on a panel at a Securities Industry and Financial Markets Association conference in New York on Thursday. Actually having a broker and a buyside representative sitting at the table and voting on plan amendments, I think thats the appropriate structure.
U.S. stock trading is spread across 11 exchanges — including four owned by Bats — and more than 40 alternative markets. The SIP systems help tie that together, serving as a central database of equity prices. Their importance was highlighted in August 2013 when a malfunction with Nasdaqs SIP halted trading in Apple Inc., Google Inc. and thousands of other stocks for three hours.
Citigroup Inc.s Michael Masone, speaking on the same panel as Concannon, praised the Bats proposal.
Its a stance that nobody else has been willing to take, but I believe that its the right thing to do, said Masone, a director and counsel in the equities division of Citigroup Global Markets.
