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Meet The Person Who Will Determine If The Market Is "Fair

Tyler Durden's picture




 

A week ago, we were surprised to learn that one of the most prominent critics of HFT, Joseph Stiglitz, had been barred from an SEC Panel that will "advise regulators on issues facing U.S. equity markets."  Today, a day after the SEC busted DirectEdge for failing to "accurately describe the order types being used on the exchanges" namely the infamous Hide not Slide, even after said order had repeatedly made the front page of the WSJ, the SEC finally announced the full list of members of the "New Equity Market Structure Advisory Committee" which will focus on the structure and operations of the U.S. equities markets.

Here is what it said:

The Securities and Exchange Commission today announced the members of a new Equity Market Structure Advisory Committee, which will focus on the structure and operations of the U.S. equities markets.

 

The committee will provide a formal mechanism through which the Commission can receive advice and recommendations specifically related to equity market structure issues. 

 

The members of the committee come from different sectors of the financial services industry, academia and from public interest groups.  The members were approved by all five Commissioners.

 

“Additional expertise from a diversity of backgrounds and viewpoints will be invaluable to us in ensuring that our markets continue to operate openly, fairly and efficiently to benefit investors and promote capital formation,” said SEC Chair Mary Jo White.  “This impressive committee will provide extremely helpful input as we continue to move forward in our efforts to enhance our equity market structure.”

 

Among the issues the committee is expected to be asked to discuss are those relating to the review of SEC Regulation NMS (national market system), the role of exchanges in the current market structure, and the presence and effect of conflicts in the routing and execution of equity orders. 

 

The committee is expected to hold public meetings approximately four times a year.  The committee’s first meeting is expected to be held after the announcement of the establishment of the committee is published in the Federal Register.  The committee has a two-year term, which can be renewed by the Commission.

 

Stephen Luparello, Director of the Division of Trading and Markets, will be the designated federal officer on the committee.

There were some surprising names among the member participants as shown below:

  • Matthew Andresen, Co-Chief Executive Officer, Headlands Technologies LLC
  • Reginald Browne, Senior Managing Director & Global Co-Head, ETF Group, Cantor Fitzgerald & Co.
  • Kevin Cronin, Global Head of Trading, Invesco Ltd.
  • Brad Katsuyama, President and CEO, IEX Group Inc.
  • Ted Kaufman, Professor, Duke University Law School and former U.S. Senator from Delaware
  • Richard Ketchum, Chairman and CEO, FINRA
  • Manisha Kimmel, Managing Director, Financial Information Forum
  • Mehmet Kinak, Vice President and Head of Global Equity Market Structure and Electronic Trading, T.Rowe Price Group
  • Andrew Lo, Charles E. and Susan T. Harris Professor of Finance and Director, Laboratory for Financial Engineering, MIT Sloan School of Management and Chairman and Chief Investment Strategist, AlphaSimplex Group 
  • Joseph Mecane, Managing Director, Barclays PLC
  • Eric Noll, President & CEO, Convergex Group
  • Maureen O’Hara, Robert W. Purcell Professor of Finance, Johnson Graduate School of Management, Cornell University and Chairman of the Board, Investment Technology Group Inc.
  • Joe Ratterman, CEO, BATS Global Markets Inc.
  • Nancy Smith, Corporate Secretary & Chief Integration Officer, AARP
  • Chester Spatt, Kenneth B. and Pamela R. Dunn Professor of Finance, Tepper School of Business, Carnegie Mellon University and Director of its Center for Financial Markets
  • Gary Stone, Chief Strategy Officer, Bloomberg Tradebook LLC

Most of the named individual above are, sadly, placeholding figureheads. Because there is only one person on the list whose participation matters, and whose presence is not at all surprising. The following:

The same Citadel whose Citadel Tactical Trading fund returned 20% in 2014 and was in the Top 10 of all best performing large hedge funds.

The same Citadel which while running hundreds of billions in prop capital (recall that at nearly 10x Citadel is the most levered hedge fund in the world), and making billions in profits, also handles 25% of all US listed stock trades for retail, 20% of all equity options and 13% of total consolidated volume.

The Details:

As an automated market maker from its 2006 inception, Citadel Execution Services had the advantage of not being weighed down by legacy systems. Jamil Nazarali well remembers how hard the transition from manual trading could be: Currently head of the CES unit of $14 billion, Chicago-based hedge fund firm Citadel, Nazarali was on Knight Capital Group's strategy team in 2000 when the New York Stock Exchange was moving toward decimal pricing; he became co-leader of Knight's automation project. Within two years the vast majority of trading was automated, and by 2005 Nazarali had risen to global head of Knight's electronic trading. He joined Citadel in 2011 and took the helm of CES in 2012 after Andrew Kolinskys retirement. Citadel's execution business is one of the world's biggest, handling 25 percent of all U.S.-listed stock trades for retail investors, 20 percent of equity options volume and more than 13 percent of consolidated volume in equities. If you trade, there's a 1-in-7 chance that Citadel is on the other side of the trade, notes Nazarali, 46, a University of Chicago MBA and former Ernst & Young and Bain & Co. consultant.

But surely not frontrunning the trade... or steering momentum away from the herd especially if the herd is selling. Because clearly there is no conflict of interest there.

More importantly, as regular readers know by now, when it comes to preventing the proverbial "plunge", or is otherwise in need of algo-facilitated support at key market inflection points, the New York Fed, which never transacts on its own behalf - after all that is illegal - does so through an intermediary entity: the one named above. Which is why we have no doubt that with the above fortress protection, pardon the pun, there is little if anything that can happen to change the manipulated, centrally-planned and, please don't laugh, fair market.

In fact, everything will remains just as it is. Which, incidentally, is precisely how the Federal Reserve likes it.

 

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Tue, 01/13/2015 - 19:45 | 5657784 SickDollar
SickDollar's picture

Hello Muppet

Tue, 01/13/2015 - 19:56 | 5657814 Bananamerican
Bananamerican's picture

hello motherfucker

 

anyone else notice but if you stare at that bitches face long enough his skin turns red and horns sprout from the top of his head like jon lovitz?

Tue, 01/13/2015 - 19:59 | 5657820 knukles
knukles's picture

He does have a Satanic smile.   Wisely, I diveerted my eyes in time.

Tue, 01/13/2015 - 20:00 | 5657824 wintermute
wintermute's picture

Mr. Bean

Tue, 01/13/2015 - 20:05 | 5657845 Pool Shark
Pool Shark's picture

Andy Serkis

 

Tue, 01/13/2015 - 20:10 | 5657857 0b1knob
0b1knob's picture

Story breaking!   Jesus tries to kill Boehner.

http://www.wcpo.com/news/local-news/hamilton-county/deer-park/michael-ho...

Man claiming to be Jesus tries to poison Boehner who is devil.

I doube that the guy is Jesus.  Boehner may actually be the devil however.

Tue, 01/13/2015 - 20:11 | 5657866 TheFourthStooge-ing
TheFourthStooge-ing's picture

So that's what net.kook The Spirit of Truth has been working on.

Tue, 01/13/2015 - 20:13 | 5657872 whotookmyalias
whotookmyalias's picture

I feel so much better. That smile makes him immediately seem sincere and honest.

Tue, 01/13/2015 - 20:30 | 5657940 PrayingMantis
PrayingMantis's picture

 

 

... >>> "Head of Execution Services"

     ... sounds extremist to me ... :)

Tue, 01/13/2015 - 21:46 | 5658166 NoDebt
NoDebt's picture

"Joe Ratterman, CEO, BATS Global Markets Inc."

After a stint on this committee they'll get the IPO off the ground finally.

Wed, 01/14/2015 - 02:16 | 5658893 jeff montanye
jeff montanye's picture

looks like dick clark before the exorcism.

Tue, 01/13/2015 - 20:21 | 5657900 MsCreant
MsCreant's picture

Mike is nuts. You don't talk about your plans otherwise.

Tue, 01/13/2015 - 20:25 | 5657915 MsCreant
MsCreant's picture

Grinch. Check out the smile if you dare look.

Tue, 01/13/2015 - 21:48 | 5658170 NoDebt
NoDebt's picture

Grease his hair back a little and it's Desi Arnaz.  

Tue, 01/13/2015 - 20:24 | 5657916 MsCreant
MsCreant's picture

You're a mean one, Mr. Nazarali

Tue, 01/13/2015 - 20:44 | 5657969 GOSPLAN HERO
GOSPLAN HERO's picture

tribe like

Tue, 01/13/2015 - 21:27 | 5658098 DeadFred
DeadFred's picture

Esau's half of the tribe though.

Tue, 01/13/2015 - 19:46 | 5657787 rdkyote
rdkyote's picture

Those with the gold make the rules... or something

Tue, 01/13/2015 - 19:49 | 5657793 q99x2
q99x2's picture

Well then BTFD its software stupid.

Tue, 01/13/2015 - 19:49 | 5657794 TeamDepends
TeamDepends's picture

Says here he's in the "execution business". Still, he looks kind of shifty.

Tue, 01/13/2015 - 20:12 | 5657874 TheFourthStooge-ing
TheFourthStooge-ing's picture

Kind of reminds me of that Tro-lo-lo-lo-lol guy.

Tue, 01/13/2015 - 20:19 | 5657896 Consuelo
Consuelo's picture

Was thinking the same thing.   Missing the dirty Irish cop though - where's he...?

Tue, 01/13/2015 - 19:48 | 5657797 gmak
gmak's picture

How is Brad Ktasuyama a place holder?

Tue, 01/13/2015 - 20:34 | 5657944 NotApplicable
NotApplicable's picture

 

In this case, he's filling the role as the "only rational alternative" that will become the way going forward. Remember, GS is a partner in IEX.

 

Tue, 01/13/2015 - 19:50 | 5657804 Steroid
Steroid's picture

It is good!

When the collapse comes noone can say they haven't tried everything.

Tue, 01/13/2015 - 19:52 | 5657805 Absolute Truth
Absolute Truth's picture

Wonder if he likes nail guns?

Tue, 01/13/2015 - 20:13 | 5657873 KuriousKat
KuriousKat's picture

We need an army of Chauncey Gardeners with pruning tools to clear the Temple.

Tue, 01/13/2015 - 20:23 | 5657907 TeamDepends
TeamDepends's picture

Doctor: This won't hurt a bit. (jabs Chauncey with needle)
Chauncey: It did hurt.

Tue, 01/13/2015 - 20:18 | 5657886 Consuelo
Consuelo's picture

Is that Virgil (The Turk) Sollozzo...?

 

 

Tue, 01/13/2015 - 20:22 | 5657906 jldpc
jldpc's picture

Why are there presumably American citizens -so we are told - leavin the good old USA going to join those people in the - so called- middle east to do what they do; when there are plenty of persons deserving of their brand of treatment right here? Apparently few get the "word" on who is doing IT to all of us. IT=rigged markets. "Rigged"= not fair to all comers whether wealthy or poor traders/investors. But why leave to correct inequity abroad? Where are the outspoken ones here? Committees made to do what? Be deaf dumb and blind? Oh well. We watch. We listen. We comment. But the level of selfish greed abounds; all without conscience apparently. An honest man has no place in the USA.
?

Tue, 01/13/2015 - 20:28 | 5657928 pauhana
pauhana's picture

The fox is truly in charge of the henhouse.

Tue, 01/13/2015 - 20:40 | 5657957 papaswamp
papaswamp's picture

Not sure there is a henhouse anymore....

Tue, 01/13/2015 - 22:43 | 5658370 Falconsixone
Falconsixone's picture

Turned it in to a shithouse a while back when skunks got in and killed all the hens.

Tue, 01/13/2015 - 20:42 | 5657962 Chippewa Partners
Chippewa Partners's picture

Brad Katsuyama has forgot more about HFT than those others know.

Why aren't institutional clients demanding money managers trade on the IEX?

Tue, 01/13/2015 - 20:46 | 5657972 WTFUD
WTFUD's picture

The SEC after consulting with Goldman & JPM announced the full list of . . . .

Tue, 01/13/2015 - 20:56 | 5658005 Fuku Ben
Fuku Ben's picture

Stiglitz the newest Sniglets

The new list reads like a who's who for the NWO

A nice PC mix of a few Asians (1-J, 1-C) a handful of Eurasians and a disordinately high number of Phoenicians there be (Sung loosely to the tune of Partridge in a Pair Tree w/ a Pirately arrghh twist for the Phoenician ending)

Ahoy mateys! Welcome aboard the good ship Charlie-Pop

We're currently flying the fraud at near maximum altitude and expect to be on the ground in seconds once we get the wink, nod and okay sign from Captain Hook

Tue, 01/13/2015 - 20:59 | 5658013 yogibear
yogibear's picture

BS, it's Fareed Zakaria from CNN!

http://www.cnn.com/profiles/fareed-zakaria-profile

Tue, 01/13/2015 - 21:27 | 5658106 kchrisc
kchrisc's picture

A financial Warren Commission. LOL

The banksters need to repay us.

 

They didn't even extend an invitation for my guillotine and I to be on the commission.

Tue, 01/13/2015 - 21:28 | 5658110 bitusa
bitusa's picture

Maybe every listed compony should move to the "Pink Sheets"

Tue, 01/13/2015 - 22:41 | 5658359 Falconsixone
Falconsixone's picture

Do compony's bite?

Tue, 01/13/2015 - 22:04 | 5658241 RMolineaux
RMolineaux's picture

In its efforts to maintain the status quo the Fed and its allies on Wall Street are sowing the seeds of destruction of the capital formation role of the markets.  This will be followed by centralized capital assignment on the Chinese model under an authoritarian regime.  Call it fascist or socialist as you like, they will not be much different.

Tue, 01/13/2015 - 22:37 | 5658348 Falconsixone
Falconsixone's picture

He looks like a brain surgeon, thief or rocket scientist.

Tue, 01/13/2015 - 22:42 | 5658367 fibonacci's claus
fibonacci's claus's picture

i got an idea.  let's spy on the u.s government and tell them that we are being transparent.

Tue, 01/13/2015 - 23:41 | 5658548 bluskyes
bluskyes's picture

Is it just me, or does his hair look like the branches on Caesar's head?

Wed, 01/14/2015 - 03:21 | 5658969 MedicalQuack
MedicalQuack's picture

Big SEC news today, they nailed a quote stuffer...is this the first?

MedicalQuack #SEC Gets one for Quote Stuffing-charges filed-#KillerAlgorithms the FBI sting watched him do it bloom.bg/1swAsMn

Yesterday, to celebrate the BATS fine that was assessed, well Goldman Sachs just happened to post a joyous image of all their quants and engineers on Twitter..."Coding up a storm"...

https://twitter.com/GoldmanSachs/status/554680474392870913/photo/1


Wed, 01/14/2015 - 10:31 | 5659678 chinaboy
chinaboy's picture

In Citadel we (don't) trust.

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