STA Special Report - U.S. Market Structure - 2008

Written by: John Giesea

30 April 2008

Each November, STA leadership meets to set priorities in place for the coming year. In December, we committed to create another Special Report.

This edition represents collaborative efforts over recent months and we think the result is a document that provides commentary on current conditions, as well as specific recommendations intended to further enhance a market that has undergone a complete makeover in the past 12-18 months.

Regulation NMS had a stated objective of “modernizing and strengthening” U.S. markets – clearly those objectives have been achieved. Our markets have performed admirably in recent months when one considers the turbulent economic times, accompanied by record volume and unthinkable levels of data being transmitted.

STA has held that market structure is constantly evolving and that we should be able and willing to make adjustments allowing for continuous improvements resulting in a world-class market for equities. As such, we have discussed and made recommendations in the Order Protection Rule, market openings, Regulation SHO and market data fees.

Balancing regulation and competition remains the key for U.S markets to maintain global leadership.

The ‘writing” committee consisted of 10 members of STA leadership and the outcome is a result of “regular and rigorous” debate. STA does not regularly issue such commentary (last in 2003) and we are committed to do so only when we feel that we can add value to our markets.

We look forward to active discussions on the topics discussed in the coming weeks.

This report was created by a team of 13 over the last several months and has been unanimously approved by the STA Board of Governors. These individuals are Bart Green, Peter Driscoll, Brett Mock, Lou Matrone, Lisa Utasi, Joseph Cangemi, Mark Madoff, Joseph Mecane, Tony Sanfilippo, David Franasiak, Joel Oswald, Terry Mulry and John Giesea.