There were some very interesting comments from Duncan Niederauer, NYSE CEO, in their Q4 earning call. From the transcript, http://seekingalpha.com/article/187599-nyse-euronext-q4-2009-earnings-call-transcript?page=2:
“The SEC is currently engaged in a market structure review and we are hopeful that any changes they enact will help even out the playing field and raise the regulatory bar for less regulated trading venues which we believe would be to the benefit of investors.
In Europe, regulators are embarking on a review of MiFID two years after its implementation. I believe that the regulators in Europe will learn some important lessons from the market fragmentation that resulted from the US deregulation.
As we endeavor to keep our European business stabilized, I am hopeful that the landscape there is not going to turn into something there like we have witnessed here in the United States. I am also confident that the debate around critical market structure issues will resonate across the US and Europe.”
The recently released SEC concept release asks alot of questions about market structure in the U.S. We think that Mr. Niederauer’s comments pretty much sums up the state of our equity markets. Defenders will have you believe that this patchwork of exchanges, ECN’s, ATS’s and dark pools encourages innovation and competition. However, ask yourself, do you think our current market structure is what the regulators would have dreamed up if they could do it all over again? We doubt that very much.