Conscientious faithful words grate upon the ear. In an effort not to be lost in the ocean of comment letters to the SEC, we at Data Boiler want our views to be heard. In this article we use analogies to promote communication and understanding of the complex subject of market structure reform. Please do not block us from shedding light on taboo topics. Constructive debate helps avoid the phenomena of “blind people and an elephant”.
<p><span>In the EU, Capital Markets Union (CMU) set to ban payment for order flow (</span><a href="https://www.risk.net/regulation/7946841/germany-has-enough-support-to-block-eus-pfof-ban">PFOF</a><span>), while Germany is trying to block it. This controversial matter stirs up debate in the US as well. One camp favors the SEC Chair Gensler’s hype about “order-by-order” competition published in a </span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract id=4116944">paper</a><span> that clearly benefits auction markets, such as Apex CODA. Another group of academic </span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract id=4189239">researchers</a><span> suggests ‘no evidence that PFOF harms price execution’. In an </span><a href="https://www.linkedin.com
<p><span>Do market participants need better ability to evaluate potential conflicts of interest of multilateral trading venues? No. Market participants are not “Cops” to regulate trading venues, the Securities and Exchange Commission (SEC) is. The public relies on market regulators and Self-Regulatory Organizations (SROs) to assure that they are not scammed in the </span><b>open market</b><span>. Such a market is called the Exchange. Otherwise, civilians are left with reading all the “small print” (Form ATS, ATS-N, ATS-R, ATS-G and other enhanced disclosures) on their own and taking risk engaging with a trading partner or counterparties. These are called </span><b>bilateral deals or multilateral trade agreements</b><span>. The trade terms and corresponding recordkeeping are subject to privacy protection. Regulators should refrain from intervening legitimate private prac