Grand Bargain Survey Results: Let's Not Throw The Baby Out With The Bath Water

A number of recent proposals seek to reform US equity market structure to eliminate complexity and conflicts of interest. But what do market participants think?

In January and February 2015, TABB Group conducted a survey to gauge market participant feedback on a series of US equity market structure reform recommendations and pilot announcements by NASDAQ, ICE and BATS. The information is being released on the heels of Rep. Stephen Lynch’s (D-Mass.) proposed bill to implement a pilot program on the impact of the maker-taker pricing model.

In contrast to the proposed maker-taker pricing legislation, our survey results indicate that the most impactful market structure reform would be updating best execution obligations. Fifty-five percent of survey participants ranked best-ex obligations as the “most important,” versus 12% who identified changes to the maker-taker pricing model as “most important.” The survey respondents support a focus on the cause, and not the symptoms, of market structure issues.

The survey results include the responses from more than 140 broker-dealers, asset manager/hedge funds, execution venues, academics and vendors regarding the ICE/BATS Grand Bargain proposals along with the most impactful ways to reduce market fragmentation and complexity.

This report is available to TABB Group Research Alliance Equities Member and qualified media. For more information or to purchase report, please email research@tabbgroup.com.