This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

SEC chair discusses concerns in the equity market structure

  • Speech — gray Image

Oct 03, 2013

At the Security Traders Association’s 80th Annual Market Structure Conference, SEC Chair Mary Jo White shared her thoughts on how to ensure that the U.S. equity markets continue to serve the interests of all investors.

Ms. White noted that investors and public companies are the key groups that determine the success and failure of the equity markets, but she also noted that strong secondary markets are needed to allow companies to attract investors to raise capital in primary offerings. In recent years, the number of U.S.-listed companies has dropped from more than 8,000 in 1997 to approximately 4,900 currently and the equity participation rate has dropped in recent years from its high in 2007 of 65 percent of U.S. households. Ms. White noted that the SEC needs to focus on the fundamentals of the markets in order to address the problems present in the equity market structure. She outlined three important fundamentals that will be the subject of SEC focus:

  • Operational integrity: A focus on operational integrity is needed in the highly technological markets to strive towards zero errors and no interruptions in the markets. Broker-dealers, exchanges, alternative trading platforms, and other systems are all part of the market system and the SEC is including each one in its focus on operational integrity.
  • Market structure assumptions: Challenging the assumptions that underlie today’s market structure is important because technology and trading practices are constantly evolving. Ms. White specifically noted two assumptions that are the focus of the SEC’s review: a one-size-fits-all market structure and the exchange competition and self-regulatory model.
  • Empirical evidence: Decisions about the markets should be based on empirical evidence, instead of anecdotal information. Ms. White noted that the SEC is working toward developing better sources for this evidence and is launching a Web site shortly to provide the empirical information it has gathered through MIDAS so users have access to key market metrics and trends.

Please click for the full text of the speech on the SEC's Web site.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.