This article was penned by CAPIS

 

Were you able to attend last week’s 88^th Annual Security Traders Association Annual Conference in Washington D.C.? Curious about the topics and discussions that took place?

CAPIS was there for the first in-person industry-wide STA confab since 2019 and presents a collection of select highlights and tidbits from the event.

 

Panel:

Competitive Landscape between Brokers & Exchanges Panelists: Joe Mecane, Citadel Securities & Jonathan Kellner, MEMX Moderator: Kimberly Russell, SSGA

• SSGA’s Russell – this year we saw days with levels of off exchange trading rising over 50 percent.
• MEMX’s Kellner said he would like to see more trading flow come on exchange. He noted the importance of the public quote.
• Mecane said Citadel wants Rule 605 reform but there are a number of issues “in the weeds” which results in Rule 605 underestimated price improvement.

 

Panel:

Industry Update on T+1 Settlement Panelists: John Abel, DTCC & Bob Walley, Deloitte Moderator: Tom Price, SIFMA

• DTCC’s Abel said T+0 means either real time gross settlement or end of day settlement – and there is scant interest for real time gross settlement.

 

Interview:

Doug Cifu, CEO, Virtu Financial Moderator: Tim Mahoney, Former CEO, BIDS Trading

• Cifu stated that PFOF is an expense for Virtu – and that of the 250 platforms he does business with, 12 take a rebate
• Citadel, Virtu, and Susquehanna all have the exact same PFOF to Schwab. Cifu added that while there are conflicts, they have been “wholly mitigated” through disclosures and flat payments.
• Cifu said Rule 605 needs to be updated to include price improvement on odd lots and should be updated to reflect the price improvement provided by wholesalers.

 

Panel:

Evolving Relationships Between ATS’s & the Buyside Panelists: Mehmet Kinak, T. Rowe Price & TR Lazo, BIDS Trading Moderator: Jessica D’Alton, UBS

• CBOE’s Inzirillo said there is a lot to be done to level the playing field between exchange trading and off-exchange trading
• Rowe’s Kinak said off-exchange trading is a way to keep anonymous order flow. He commented he does not have a strong interest in always interacting with retail. He concluded there are too many public exchanges.
• UBS’ D’Alton noted there has started to be a deemphasis on speed in the industry.

 

Panel:

ETFs: Current Landscape Panelists: Reggie Browne, GTS, Adam Gould, Tradeweb & Eric Pollackov, Invesco Moderator: Deborah Fuhr, ETFGI

• Invesco’s Pollackov recounted proposed legislation to tax the “in-kind” transactions for ETF redemption, which currently are non-taxable events. He explained many people do not realize the average investor in an ETF lives under $400,000 a year in annual income, which is the threshold set by President Biden under which he will not increase taxes.
• GTS’ Browne said this tax would directly impact new investors which have been coming into the market in droves during 2020. He wants this tax proposal killed.

 

Panel:

Future of Electronic Trading Panelists: Dmitri Galinov, 24 Exchange & Troy Draizen, JonesTrading Moderator: Shane Swanson, Coalition Greenwich

• Swanson said every part of the trade life cycle is moving closer to the cloud
• Galinov said the cloud does not offer low latency solutions.

CAPIS Note:  Williams & Jensen notes contributed to this blog

 

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