When the Flash Crash hit, we had a Joint CFTC/SEC appointed committee look at the issues.

Here was the make up of the committee:

CFTC-SEC Advisory Committee on Emerging Regulatory Issues

  • Brooksley E. Born, Retired Partner, Arnold & Porter LL.P, Former Chairman CFTC
  • John J. Brennan, Chairman Emeritus and Senior Advisor, Vanguard Group
  • Robert F. Engle, Michael Armellino Professor of Finance, Leonard N. Stern School of  Business, New York University
  • Richard G. Ketchum, Chairman and Chief Executive Officer, FINRA
  • Maureen O’Hara, Robert W. Purcell Professor of Finance, Cornell University
  • Susan M. Phillips, Dean and Professor of Finance, The George Washington School of
    Business, Former CFTC Chairman
  • David S. Ruder, Professor of Law, Emeritus, Northwestern University School of Law,
    Former SEC Chairman
  • Joseph E. Stiglitz, Professor of Finance and Business Administration,
    Columbia University

When the SEC announced the Equity Market Structure Advisory Committee in January of this year, they said it would “review of SEC Regulation NMS (national market system), the role of exchanges in the current market structure, and the presence and effect of conflicts in the routing and execution of equity orders.”

Members of the Equity Market Structure Advisory Committee are:

  • Matthew Andresen, Co-Chief Executive Officer, Headlands Technologies LLC
  • Reginald Browne, Senior Managing Director & Global Co-Head, ETF Group, Cantor Fitzgerald & Co.
  • Kevin Cronin, Global Head of Trading, Invesco Ltd.
  • Brad Katsuyama, President and CEO, IEX Group Inc.
  • Ted Kaufman, Professor, Duke University Law School and former U.S. Senator from Delaware
  • Richard Ketchum, Chairman and CEO, FINRA
  • Manisha Kimmel, Managing Director, Financial Information Forum
  • Mehmet Kinak, Vice President and Head of Global Equity Market Structure and Electronic Trading, T.Rowe Price Group
  • Andrew Lo, Charles E. and Susan T. Harris Professor of Finance and Director, Laboratory for Financial Engineering, MIT Sloan School of Management and Chairman and Chief Investment Strategist, AlphaSimplex Group
  • Joseph Mecane, Managing Director, Barclays PLC
  • Jamil Nazarali, Senior Managing Director & Head of Execution Services, Citadel Securities
  • Eric Noll, President & CEO, Convergex Group
  • Maureen O’Hara, Robert W. Purcell Professor of Finance, Johnson Graduate School of Management, Cornell University and Chairman of the Board, Investment Technology Group Inc.
  • Joe Ratterman, CEO, BATS Global Markets Inc.
  • Nancy Smith, Corporate Secretary & Chief Integration Officer, AARP
  • Chester Spatt, Kenneth B. and Pamela R. Dunn Professor of Finance, Tepper School of Business, Carnegie Mellon University and Director of its Center for Financial Markets
  • Gary Stone, Chief Strategy Officer, Bloomberg Tradebook LLC

The second group has one current exchange representative, Joe Ratterman of BATS. There are no representatives from the listed exchanges. There are a couple of former exchange representatives in Eric Noll and Joseph Mecane.

Where are the representatives from the Major Market Initiative or the Principal Traders Group?  

We are setting ourselves up for another bad outcome with the make up of this latest SEC committee.  All these parties have vested interest in the markets, even the academics.  Listed markets should have some representatives and so should prop traders.

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