Featured Article
The Real Value of STA*
STA Chairman
It has been another fascinating year in the world of market structure. The current SEC regime continues to show historic ambition in their desire to improve secondary markets, as well as the competitiveness of primary markets relative to private equity.
In their ambition, regulators have over the past two or so years, presented the industry with a number of ideas, proposals and guidance notices. Not all of these ideas have been received enthusiastically by all corners of our industry. Indeed, the SEC has weighed in on some of the most contentious issues of our time.
Asset managers, pension plans, exchanges, vendors and dealers must now grapple with a variety of potential changes. These include a potential Transaction Fee Pilot in 2020, OPR review, asymmetric speedbumps, 606 reporting reform, finalizing the Consolidated Audit Trail, multiple new equity markets on the horizon, a pilot to study transparency in the corporate paper market, guidance around market data fees and the potential suspension of Universal Trading Protocols for illiquid issues. And that is just the U.S. market. Canada brings it own list of unique challenges.
As the number of seats in our industry continues to decline, and market and regulatory complexity increases, our role as educator, advocate and networking facilitator takes on increased value. Attendance at our annual conference suggests that I am not alone in this belief.
While the vast number of issues at play makes for great conference programs, it also creates a real burden for our membership, particularly for smaller to mid-size players and regional firms, which may lack the scale to follow the various debates in real time and as closely as they may wish to. This has, in my mind, made organizations like STA more valuable in recent years. As the number of seats in our industry continues to decline, and market and regulatory complexity increases, our role as educator, advocate and networking facilitator takes on increased value. Attendance at our annual conference suggests that I am not alone in this belief.
In our efforts to educate and represent various constituencies, we recognized that the impact of these potential changes looks different for every firm. As such, we focused heavily on reaching out to this community and engaging its members in order to understand and address their specific concerns. Our efforts can be seen in work we’ve done this year on MiFID II, Continuing Education, Diversity and Inclusion, and reporting three-party algorithm usage in the new 606 reports – an issue that both STA and our friends at FIF have been hyper-focused on for most of 2019.
But STA is about more than just regulatory advocacy and education. We also present dozens of networking opportunities across the continent. These events allow members to meet potential clients, solutions providers and, yes, even future bosses. They allow competitors a chance to compare notes on regulatory changes and solution providers. They are a great catalyst for younger members looking to build relationships and learn about the industry at large. And they are a great place to make some wonderful friendships.
In many cases, the relationships forged are not just commercial ones, but rather real friendships that will last long after we are drummed out of the industry. These are relationships started at STA and Canadian STA events and built over time. These friends become important sources of information, guidance and referral over the years. To me, this is the real value of STA.
*Excerpts from Oct. 2, 2019 speech at
STA's 86th Annual Market Structure Conference
