Eric Noll Financial Times Op-Ed




Eric Noll is the CEO of Convergex Group LLC (ever since 2013, when he took the helm  after the firm was smeared in a complicated ethics mess which involved trading against client order flow). Prior to Convergex, he was an EVP at NASDAQ OMX, and before that he worked at the market maker / high frequency trading firm Susquehanna International Group. He obviously understands the needs of high speed traders, for-profit stock exchanges, and brokerage firms.

While we have often disagreed with Noll on many market structure issues, especially while he worked at NASDAQ OMX, we are very impressed with an Op-Ed he has just written in the Financial Times, where he demonstrates that he understands the needs of investors –retail and institutional. We highlight that Op-Ed for you this morning – titled Give Investors Top Priority In Stock Markets.

Noll acknowledges that:

  • Our modern markets have deteriorated.
  • Our modern markets cater to high speed traders over investors – both retail and institutional.
  • Liquidity is confined to approximately 100 names that account for 80% of volume.
  • Investors fear trading on stock exchanges, and run to dark pools, where their treatment is not particularly friendly either.


He then goes on to make some very strong statements and an important proposal:

  • “Speed should not be the most important criteria in determining how orders are handled unless we want markets that do not focus on what the real investor needs in the market.”


  • “We cannot continue to give some an advantage and then cry foul when market mishaps occur. It is most important to enshrine both retail and institutional investors above all market participants. Elevate customer orders in all markets ahead of brokers, market makers and high-frequency traders and move the markets to a price-customer order priority system.”


  • “I propose that exchanges and other market venues create a simple tiered system for order executions, with customer orders at the top, followed by orders from market makers, and lastly orders from high frequency and professional traders. This sends a clear message that quality of execution is more important than speed.”



Bravo Mr. Noll.


Please read his Op-Ed.


We can only hope that leadership at the SEC has read it, and that it inspires them to take a leadership role and implement real change, and to stop looking to staked industry insiders to give them “the ok”.


To date, events like Flash Crashes have not inspired the SEC to elevate the needs of investors over high speed traders. To date, books such as Broken Markets and Flash Boys have not inspired them to act decisively either. Perhaps the words from a well-known friend of theirs – Mr. Noll – will inspire them to act. He is not saying anything that they do not already know; former Chair Mary Schapiro’s 2010 speech demonstrates this.


I suppose we will see later this month when the SEC convenes its 2nd Market Structure Advisory Committee meeting. Hopefully they remember their mission:


“to protect investors, to maintain fair, orderly, and efficient markets, and facilitate capital formation.”


Hopefully they see that even in their own mission statement, investors come first.