President's Journal
Register - STA's 75 Annual Conference
Written by: John Giesea
24 July 2008
“Actionable Intelligence – STA’s 75th Annual Conference”
The Security Traders Association has long been known for its leadership in presenting Annual Conferences focused on market structure. This year we will commemorate STA’s 75th Annual by offering a broader expanse of topics and knowledge that will serve to make the event even more unique than in the past. We are excited with our lineup and look forward to seeing all of you in Boca!
Market Structure and Regulation
We have invited Commissioner Kathleen Casey and Trading and Markets Director, Erik Sirri to present the latest in SEC activity.
We have senior executives from virtually all leading exchanges and market centers providing updates on their competitive position in today’s markets, both equity and options. Additionally, we will hear an update from the Managed Fund Association’s President, Richard Baker.
NYSE Regulation and FINRA will provide the latest in regulatory reform, as well as important information on current regulatory focuses.
Buy Side Focus
In addition to our full content, we will present two 90-minute “Buy Side Only” breakouts designed to allow informal discussions focused on issues impacting their unique needs in the market today.
Addressing the issue of cost for our Buy Side community, we are offering complimentary registration ($0) for qualified STA Buy Side members.
Broader Topics
We are confident that these additional speakers will provide intriguing new thoughts to expand and broaden our participants’ knowledge base.
Jeffrey A. Rosensweig, Director of the Global Perspectives Program at Emory University will offer insights on the global economy.
Richard Bitner, author, will offer “Tales of Subprime Lending.”
John Spence, a renowned speaker, will focus on “Excellence by Design.”
STA Hospitality
STA continues to support and promote the value of the individual professionals who allow our markets to function. Further, we have a time honored tradition of supporting important relationships that not only allow for better business but for valued friends and competitors.
Please join us as we celebrate our 75th Annual – with special guests including some 25 of our Past Chairmen/Presidents.
Read the rest of the post >SEC Emergency Order - Short Sales
Written by: John Giesea
16 July 2008
STA is studying the release of this temporary order issued yesterday. While it is temporary and impacts a limited number of issuers it suggests the possibility of expansion, or market wide coverage in the future.
The order creates many issues and raises numerous questions that we seek to gain understanding of. The impact on the market maker exemption, derivatives, convertibles, options and a long list of other questions/concerns need to be addressed.
While this move may be politically expedient, it may have the infamous unintended consequence of significantly reducing liquidity while adding volatility and cost to market participants.
We are actively engaged on this and will keep you informed as appropriate.
FOR IMMEDIATE RELEASE
2008-143
Washington, D.C., July 15, 2008 – The Securities and Exchange Commission today issued an emergency order to enhance investor protections against “naked” short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at commercial and investment banks.
The SEC’s order will require that anyone effecting a short sale in these securities arrange beforehand to borrow the securities and deliver them at settlement. The order will take effect at 12:01 a.m. ET on Monday, July 21. In addition to this emergency order, the SEC will undertake a rulemaking to address these issues across the entire market.
“The SEC’s mission to protect investors, maintain orderly markets, and promote capital formation is more important now than it has ever been,” said SEC Chairman Christopher Cox. “Today’s Commission action aims to stop unlawful manipulation through ‘naked’ short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets.”
The Commission’s emergency order, pursuant to its authority under Section 12(k)(2) of the Securities Exchange Act of 1934, will be effective at 12:01 a.m. ET on July 21, 2008 and will terminate at 11:59 p.m. ET on July 29, 2008. The Commission may extend the order to continue it in effect thereafter if the Commission determines that the continuation of the order is necessary in the public interest and for the protection of investors, but for no more than 30 calendar days in total duration.
Comment [1]
STA's 75th Annual Conference, Boca Raton
Written by: John Giesea
10 July 2008
Program and Registration information will be up shortly.
Our 75th is taking shape – albeit a bit late – but we think our program will, again, be first rate.
Our timing allows us to plan, and present, the most timely content .
We are building a program that includes significant option content, a hedge fund update, regulatory insights, as well our usual strong market structure content.
Additionally, we have an ever increasing commitment to attract buy-side attendance. In that vein, we are offering free registration to qualified buy-side members. We believe that conducting 3 hours of buy-side only breakouts, coupled with a strong program make attendance compelling, and important.
Our 75th Annual also provides an opportunity to not only honor the rich history of our Organization but to equip our members with the tools toward a successful future.
We express sincere gratitude to our vendors who, again, will present the latest in technology as well as important resource offerings.
To our sponsors, committed and yet to commit, we thank you for allowing us to provide such a quality program at reasonable cost.
We look forward to seeing you there.
Read the rest of the post >STA's Dictum Meum Pactum Award
Written by: John Giesea
9 June 2008
In 2002, we sought to establish an award to recognize individuals whose contribution to the industry, their firm, STA and their communities were consistent with the ideals that STA has supported since its inception.
Chairman Michael Bird suggested the “Dictum Meum Pactum Award” be the vehicle to recognize these special individuals.
“Dictum Meum Pactum” or “My word is my bond” – STA’s motto since inception is as relevant today as it was in the beginning. The phrase takes root in every part of our lives and is an appropriate guide for all to follow: yesterday, today and tomorrow.
Since that time, STA has recognized the following extraordinary individuals:
2002 Bill Broka NASDAQ
2003 Rick Ketchum NYSE
2007 Hedi Reynolds Morgan Keegan and Past STA Chairman
2008 Annette Nazareth Securities & Exchange Commission
Our policy sets no annual award, but simply acknowledges individuals as circumstances dictate.
As part of our Washington Conference this year, we acknowledged Commissioner Annette Nazareth who offered the following quote in response:
It has been such a privilege to work with you and so many others at STA. It has also been great fun. Your members are very thoughtful and remarkably generous with their time. The fact that they also are such nice people and have such informative, enjoyable and entertaining conferences is icing on the cake! Please give my best to all. I hope that we can continue to work together in some capacity in the future.
I share this with you for a couple of reasons. First, that it is a special and unique recognition and, second, to share Annette’s sentiments toward STA – she commends and affirms many of our core values as individuals and as an organization.
So as we approach our 75th Annual Conference, we seek to reflect on the wonderful history of STA as well as the importance it has played in the lives of many individuals. Many have enjoyed the fruits of STA involvement and it goes to our professional lives and, equally important, the wonderful personal relationships that have been created through these efforts.
We appreciate affiliate and STA leaders who give generously for the benefit of our organization, which truly is important in your communities across North America and in Washington.
Read the rest of the post >STA Responds to WSJ Letter - 'Openings'
Written by: John Giesea
22 May 2008
The Wall Street Journal
Letter to the Editor – May 22, 2008
Stocks Should Trade at Start of Day
Your article “NYSE, Nasdaq Urged to Cut Price Divergence” (Deals & Deal Makers, April 30) glosses over an issue that is important to investors, and that is the timely opening of trading in stocks in the U.S. markets each day.
Most investors in this country would make the assumption that all stocks open for trading when the market opens. This is, in fact, the case at the Nasdaq Stock Market and it is true of all other stock markets around the world. However, at the New York Stock Exchange, only 5% of the stocks listed are available to trade beginning at this country’s opening at 9:30 a.m. There is no schedule for when an NYSE stock will begin trading, and investors must wait for an undetermined period of time for a human specialist to decide when the stock should open. Meanwhile, 65% of the market in NYSE-listed stocks begins trading elsewhere. Investors haven’t shown a willingness to wait.
The Securities Traders Association has expressed that the markets should have a “coordinated opening process.” We believe that an orderly process involves opening your market on time. Nasdaq OMX invested in technology to serve investors in a fair and transparent way and we invite the NYSE to participate. A coordinated and orderly market open is at 9:30 a.m., which is the expectation of all investors. If the STA is asking all markets to step back in time to accommodate the single market in the world that doesn’t promptly open for trading, we say no thank you.
Chris Concannon
Executive Vice President
Nasdaq OMX Group Inc.
New York
To: Letters to the Editor- Wall Street Journal
From: John C. Giesea, President and CEO
Date: May 22, 2008
We feel that it is important to respond to Chris Concannon’s letter to the editor “Stocks Should Trade at Start of Day” May 22, 2008, because we believe some facts presented may be misconstrued. While many believe that speed is important in our markets most will agree that price is at least equally important. Extending the NASDAQ Opening process to non-NASDAQ stocks has forced other exchanges to speed up their own opening processes. This competition has been beneficial to investors; it has forced other venues to focus on more timely stock openings. It has also created a good deal of confusion among investors, large and small, and brokers who must decide which venues to participate in on the open and to what degree.
While as much as 65% of NYSE volume does now trade on trading venues other than the NYSE, most of the opening prints ahead of the NYSE opening are of deminimus volume (most being under 500 shares). The NYSE still commands a dominate market share in its listed stocks (the stocks that an exchange is designated as the primary exchange for) at the opening as does the NASDAQ. The reason for this continued dominance is called price discovery. The primary exchanges bring together all of the orders to buy and sell a particular stock sent to it prior to the open and matches them at the price where supply meets demand. Yes, sometimes this takes a few minutes, and sometimes more. This is the issue for some: the opening process takes too much time. To be fair, the opening process takes a few minutes no matter where your order is placed. The NASDAQ requires orders that wish to participate in their opening to be delivered to the exchange at 9:28 EDT and will only accept orders which offset any supply/demand imbalance between 9:28 and 9:30 EDT.
The STA believes that the opening is a unique and important time and price. Chris knows from direct discussions with us that we want to improve the process whatever the primary exchange, we do not want to protect any single competitive model. We believe that providing an opportunity for the most orders to participate in the price discovery process will yield the fairest price for everyone involved, and shouldn’t that be the exchanges goal also? We suggest the question is how can real price discovery be accomplished in an efficient unbiased manner. The STA has begun discussions with industry participants, including representatives of NASDAQ, to develop a set of industry-wide best practices for an efficient opening process.
Read the rest of the post >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.
Click here to view the Special Report in its entirety.
Read the rest of the post >
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