Regulators Are Warning About Liquidity Problems Due To Changes In Market Structure

The Financial Stability Oversight Council (FSOC) raised some concerns in their annual report  released this week about the risk of high-speed electronic trading:

“For example, for highly interdependent markets such as the cash and futures Treasury markets, which take price signals from each other, the varying degree of electronification and differences in trading systems among them may cause changes in liquidity demand in one market to spill over to the other, possibly amplifying price movements in periods of market stress.” p.107

The (more…)




SEC Commissioner Luis Aguilar has always been a friendly investor voice, and we are sad to see that he will be leaving the SEC after his 2nd term expires in June (he has served since 2008). To serve two terms that have included  the Financial Crisis and the Flash Crash (and their aftermaths) is no small feat, and he served the public admirably. He doesn’t leave us empty handed! This week, in advance of the SEC’s first Market Structure Advisory Meeting (on Rule 611), he released a fantastic document, (more…)