NJ Rep. Scott Garrett’s Brand Spankin’ New Market Structure Roundtable!



Rep Garrett is holding a Market Structure Roundtable on Monday May 13th, 2013 that will focus on market fairness and consequences of Reg NMS, implemented in 2007. This will not be the first roundtable that Garrett has attached his name to. Nearly a year ago he presided over a roundtable that addressed virtually the same exact topics that are to be discussed on Monday. Going into last year’s roundtable, Garrett issued this press release, in which he heaped praise after praise on the structure of today’s fragmented markets:

–          “Whether it is execution speed, liquidity, or pricing, both retail and institutional investors are recognizing the direct benefits of this evolving marketplace.”


–          “Narrower spreads, faster execution and increased liquidity have all been direct results of the additional competition in the marketplace.”


–          “While there have been isolated instances of technological problems with the ‘Flash Crash’ and Facebook IPO, we must look at the empirical data as a whole.  Focusing on a couple of isolated and anecdotal events takes away from the extraordinary strides that have been made, in large part, because of the technological innovation in our markets.”



–          “In conclusion, I quote my good friend from Texas, Mr. Hensarling in giving some advice to the regulatory community, ‘first do no harm.’  Any changes to the rules of our equity markets should be after a thoughtful empirical analysis of the costs and benefits of any potential change.”


Before last year’s roundtable, it sure seemed that Garrett had made up his mind, and his sound bites sure sound like they were taken right from the HFT Defense Playbook. Fortunately, last year’s roundtable had a voice of reason and wisdom in Invesco’s Kevin Cronin, who called into question many issues of fairness including:


–          Conflicts of interest with rebates and the maker-taker model.

–          Complex and queue-jumping order types.

–          Un-displayed dark pool liquidity.

–          Broker internalization.


Since Garrett’s 2012 Roundtable, after hearing diverse testimony ranging from pro-HFT opinions from HFT firms such as Quantlab and Getco, as well as pro-investor opinion from Kevin Cronin, nothing has been done. There has been no action on any of the issues that Cronin raised that day. Let us fast forward to Monday’s 2013 Roundtable. Here are the participants for Monday’s exploratory discussions:


Panel 2 – Creating a Level Playing Field for Equity Market Participants


This panel will focus on the macro regulatory issues that govern equity market participants and any potential competitive imbalances created by the existing market structure.  Exchanges, dark pools, and internalizing broker-dealers are now all for-profit entities that provide investors with very similar execution services.  However, each of these execution venues operates under a different set of rules that provide advantages and disadvantages to each business model.  This panel will explore the various differences of the regulatory regimes and discuss potential changes to ensure a more level playing field for all market participants.




  *   Matthew Andreson, Co-Chief Executive Officer – Headlands

Technologies, LLC

  *   William Baxter, Senior Vice President and Head of Equity – Fidelity

Capital Markets Services

  *   Gary Katz, President and Chief Executive Officer – International

Securities Exchange, LLC

  *   Lawrence Leibowitz, Chief Operating Officer – NYSE Euronext

  *   Thomas Matchett, Managing Director, Retail Market Making – UBS

Americas, Inc

  *   Dan Matthisson, Managing Director, Head of US Execution and Trading

– Credit Suisse Group

  *   Elizabeth King, Global Head of Regulatory Affairs – GETCO LLC

  *   Gary Stone, Chief Strategy Officer – Bloomberg Tradebook


Panel 3 – Examining Micro-Market Structure and Trading Technology


This panel will discuss a number of contemporary trading and technology issues impacting the market.  These issues include the maker-taker pricing model, order protection rules, trading algorithms and order types, locked and crossed markets, tick-size reform, consolidated audit trail, and volatility protections.  Panelists will discuss each of these topics in greater detail with the hope of providing a better understanding of how technology and the current rules interact.




  *   Andrew Brooks, Head of US Equity Trading – T. Rowe Price Group, Inc.

  *   Jeff Brown, Senior Vice President, Legislative and Regulatory

Affairs – Charles Schwab and Company, Inc.

  *   Richard Gorelick, Chief Executive Officer – RGM Advisors, LLC

  *   Chris Issacson, Chief Operating Officer – BATS Global Markets, Inc.

  *   Eric Noll, Executive Vice President – NASDAQ OMX

  *   Paul Russo, Managing Director – Goldman Sachs Group, Inc.

  *   Jamie Selway, Head of Electronic Brokerage and Sales – ITG, Inc

  *   Richard Steiner, Head of Market Structure Strategy – RBC Capital




What does Garrett hope to hear that is different in this panel? He will likely hear pro-investor testimony much like Cronin’s 2012 testimony from TRowe’s Andy Brooks and RBC’s Rich Steiner. He will likely here pro-HFT testimony from most of the other panelists. This begs the question of what exactly is the purpose of this roundtable, which is focusing on the very same issues of a year ago – and really the same issues of the last five years. Will our elected official do anything with the testimony, or will this roundtable serve to only potentially raise Rep Garrett’s profile and visibility in this big-money debate.


We look forward to hearing the testimony and outcome of Monday’s Market Structure Roundtable. We hope it will be more than a repeat of last year’s. We hope that action will also ensue, as taxpayer money needs not be wasted yet again on the creation and organization of discussions and roundtables sans actionable outcomes, save for campaign contribution money flows.