Originally published in TabbFORUM
On Thursday, Security Traders Association continued its 88th Annual Market Structure Conference in Washington, D.C, dubbed “The Great Return.” Highlights from Day Two included sessions featuring industry leaders like NYSE Group President Stacey Cunningham, former CFTC Chairman J. Chris Giancarlo, MayStreet Chief Policy Officer Manisha Kimmel and others who offered their views on key industry issues.
Day Two of Security Traders Association’s 88th Annual Market Structure Conference in Washington, D.C., dubbed “The Great Return,” saw continued focus on some of the most pressing issues facing the securities industry. Like the first day, hot topics included payment for order flow, free trading apps and digital assets, as well as a celebration of the strength, resilience and innovative nature of U.S. and Canadian markets.
The latter topic was highlighted by Stacey Cunningham, President of NYSE Group, who set the tone with the first in-person session of the day. Cunningham pointed to a growing desire among business leaders to take their firms public. She stated that before the pandemic, companies were trying to stay private for as long as they could, leading to a lack of internal discipline and less precise valuations due to the absence of price discovery. Per Cunningham, companies today are far more eager to go public, and non-IPO routes to the public markets, such as SPACs and direct listings, are more popular than ever.
She also shared her views on market data, comparing the current landscape to the shift from cable TV to streaming services.
The changes coming to the SIPs’ governance and administration and the potential for competing consolidators were debated at length later in the day, with MayStreet’s Manisha Kimmel, Paxos’ Greg Lee and Credit Suisse’s Doug Clark, a past STA chair, discussing competition and innovation around market data and trade settlement processes.
“On a high level, introducing competition leads to better technology unburdened, better customer service, better pricing and better products, both differentiated and tailored,” said Kimmel.
The rest of the exchange community was also well-represented. Adam Inzirillo of Cboe appeared on a panel on the evolving relationship between exchanges, ATSs and the buy side. Rizwan Awan of TMX Group provided a Canadian perspective on topics like payment for order flow. Tal Cohen, Executive Vice President and Head of North American Markets at Nasdaq, was interviewed by Bloomberg News reporter Sonali Basak. Cohen shared his predictions for the SEC’s future priorities, which included promoting competition and enhancing transparency and disclosures.
Cohen also talked about sports betting, a space that has experienced tremendous growth and increasing momentum around moving to an exchange model. In September, Nasdaq announced a partnership with Sporttrade, a Philadelphia-based fintech and sports betting company.
“The opportunity in sports betting is moving to the exchange model, as opposed to the sports book model, which is one-sided,” said Cohen. “If you can bring competition to the market, customers get better spreads and more data to make better decisions.”
Other emerging technologies designed to help individuals grow their assets, such as free trading apps, remained a topic of much interest. Cunningham stressed the need for education and transparency for retail traders, stating that “when investors don’t understand how the market works, they feel it doesn’t work for them.”
Bill Huizenga, U.S. Congressman for Michigan’s 2nd district, shared his views on the topic during the opening session, stating that he does not fully understand some of his colleagues’ opposition to these platforms.
“I’m thrilled that my kids are even talking about investing, saving and working towards the future, because too many Americans aren’t doing that,” he said, asserting that retail trading apps increase interest in the markets among younger generations. “I think we should be encouraging that.”
Increased focus on crypto was another highlight of the program, which included a digital assets panel featuring ErisX CEO Tom Chippas and Coinbase Head of Institutional Products Greg Tusar, moderated by Eventus President Jeff Bell. They reflected on the differences between equities and digital assets from a market structure perspective, the growing institutional interest in this asset class and best practices for making the transition from traditional finance.
The program finished with an interview with J. Chris Giancarlo, former CFTC Chairman and current Senior Counsel at Wilke Farr & Gallagher. Nicknamed “Crypto Dad” – the title of his forthcoming book – by the crypto community, Giancarlo’s passion for digital assets and belief that they represent the future of the industry were plain to see. He reflected on his role in the space, noting that the CFTC’s 2017 decision to greenlight futures for Bitcoin paved the way for institutions to access this market.
“All the regulation in the world won’t be able to stop this new wave of crypto and blockchain,” Giancarlo said. “It’s like the repressive regimes that used to control information in a country and tried to regulate the internet when it sprung up. It didn’t work.”
Looking ahead, Giancarlo noted that DeFi will pose a huge challenge to regulators due to its inherently decentralized nature.
“Almost all regulators work the same way in any industry,” he said. “They look at an ecosystem, find the intermediaries, and offer them a deal: ‘If you give us the information we need to get a handle on this and regulate it, we’ll license you and grant you quasi-monopolistic status and erect some barriers to entry for future competitors.’ And that approach has worked in the analog world, but not for DeFi.”
Other sessions focused on ETFs, the future of electronic trading and more. The latter panel was highlighted by Dmitri Galinov of 24 Exchange and Bob Cioffi of ION Group. Galinov made his case for why the stock market should be open 24 hours a day, the subject of a recent Wall Street Journal profile.
After two days of compelling industry discussion, the conference will shift gears on Friday morning. STA’s “Morning of Philanthropy & Recognition” will include the presentation of the STA Foundation’s Big Heart for Charity Awards and a discussion with Bevon Joseph, co-founder of Greenwood Project, STA’s 2021 Charity of Choice. Founded in 2016, Greenwood Project introduces Black and Latinx college and high school students to careers in financial services, with participation growing to more than 350 students. It’s sure to be a great day, so stay tuned for more updates!