The U.S. equity market structure and path taken by the Securities and Exchange Commission to keep the infrastructure stable is OK, according to a new consultancy poll.
Tabb Group, in its recent equity market poll, found that 56 percent of equity professionals said they have solid faith in the current market structure and the SEC’s way of governing the marts.
The poll, “SEC Chair White’s Market Structure: The Industry Votes,” was conducted in July following SEC Chairman Mary Jo White’s June 5th speech where she presented a 13 step blueprint on U.S. equity market structure. The poll sourced 232 industry professionals – surveyed buy- and sell-side market participants as well as regulators, legislators, academics, consultants, vendors and media as to whether they agreed with Chair White’s 13 targeted directives as well as other hotly debated issues.
Of the 232, 56 percent reported high or very high confidence and only 18 percent reported weak or very weak confidence.
TABB senior analyst Sayena Mostowfi and research analyst Valerie Bogard, co-authors of the poll and accompanying report, noted that since taking office in April 2013, when TabbFORUM surveys indicated the lowest confidence, Chair White has taken a ‘disciplined and data-driven approach’ to enhancing equity market structure. Furthermore, the authors noted she has also stressed the importance of making ‘clear-eyed, unbiased, and fact-based assessments’ with the creation of a new market structure website with empirical data and a Market Structure Advisory Committee comprised of diverse experts
“With media and legislative inquiries into equity market structure at an all-time high, the spotlight has perhaps never been brighter,” said Mostowfi, “And for the most part the market does want change.”
As proof, Bogard explains that “a majority of participants voted for changing maker-taker pricing, revising the $.0030/share access fee cap, reviewing the functions of exchanges versus ATSs, and implementing some type of tick pilot plan.” The desire for change and reassessment exists, despite the fact that most participants reported high level of confidence in the market structure.
These sentiments exist as other less electronic asset classes are looking at U.S. equity market structure for guidance on what and what not to do as they build out their structures.
“Other economies around the world are also paying attention,” Mostowfi said. “Added attention that ups the ante as the equity industry tries to answer which parts need to change and what can remain the same.”
The 14-page, 13-exhibit report can be downloaded by TABB Group Research Alliance Equity clients and pre-qualified media. The Executive Summary is available at www.tabbgroup.com.