A  newly revised academic paper about NYSE parity caught our attention.  The paper is titled “Deviations from Time Priority on the NYSE” and was written by Professors Robert Battalio and Bill McDonald from the University of Notre Dame and Professor Robert Jennings from Indiana University.  You might remember Professors Battalio and Jennings from their 2013 paper “Can Brokers Have It All?” which suggested that retail brokers were routing to the venue that paid them the highest rebates and not necessarily the venue with best execution.  Their new paper is the first of its kind to empirically address NYSE’s parity rule and to actually quantify the cost of parity (more…)

  The SEC has announced that it has voted to adopt new Rule 610T of Regulation NMS to conduct a Transaction Fee Pilot in NMS stocks.  The pilot is structured extremely well and we believe the final data will prove that rebates are not needed to generate liquidity. We have to thank the folks at the SEC, particularly Director Brett Redfearn, for having the courage to publish the access fee proposal and then to stand up to the conflicted status quo, entrenched interests and approve a final rule which kept most of the proposal intact.  The current SEC, under Chairman Jay Clayton, has done more (more…)

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