(Adds details on the plan, background and comments from SIFMA
By Sarah N. Lynch
WASHINGTON, July 14 A major Wall Street trade
group on Monday called on regulators to consider adopting a
series of reforms aimed at improving the transparency and
resiliency of the U.S. equity markets.
The Securities Industry and Financial Markets Association,
whose membership includes about 400 banks, brokers and asset
managers, said its proposal would help reduce some of the
complexities in the marketplace and promote investor confidence.
"The evolution of our equity markets has shown that there
are aspects that should be improved or corrected," said Curt
Bradbury, chair of the SIFMA Board's Market Structure Task Force
and chief operating officer of Stephens Inc, a financial
SIFMA's suggestions to the U.S. Securities and Exchange
Commission include reducing or eliminating the "access fees"
that exchanges charge brokerages for access to stock quotes and
which take liquidity away from the marketplace.
SIFMA also proposed requiring brokerages to provide the
public with better data on how they route customer orders. It
also called for the SEC to eliminate regulatory requirements for
brokerages to connect to trading venues that do not add
"substantial liquidity" to the market, which SIFMA said would
likely help reduce the number of trading venues and simplify the
"We are trying to take fragmentation head on," SIFMA's chief
executive officer, Ken Bentsen, said.
In addition, SIFMA said the SEC should put more pressure on
the exchanges to invest in securities information processors
(SIPs), which provide market data feeds, so that all investors
can get information at the same time.
Over time, the group said, SIPs should be phased out and
replaced with "multiple processors that would distribute public
market data and compete on performance and cost."
SIFMA's recommendations come at the same time that the SEC
is working to craft a handful of equity market structure
SEC Chair Mary Jo White recently said she planned to unveil
rules to combat disruptive trading, promote transparency on how
anonymous "dark pool" trading venues operate, and require
brokerages to disclose more details on how institutional
clients' orders are routed.
Several elements of SIFMA's plan dovetailed with White's
proposal, including the call to require brokers to provide
institutional clients with venue execution reports.
White has not explicitly called for reducing or eliminating
access fees, but in recent weeks there has been growing support
for the idea.
Last week, several key Wall Street executives, including
Intercontinental Exchange CEO Jeffrey Sprecher and
Citadel CEO Ken Griffin, called for similar steps in U.S. Senate
Reducing or eliminating fees would likely help reduce
conflicts of interest, because exchanges typically use those
fees to provide rebates to brokerages that provide liquidity.
SIFMA said the fees, which are currently capped at 30 cents
per hundred shares, should be cut to 5 cents or eliminated.
(Reporting by Sarah N. Lynch; Editing by Susan Heavey and