SEC Locks Retail Brokers Out Of Stock Market Reform Meeting

Posted on April 29, 2015 by admin

Brokerdealer.com blog update profiles the SEC intentionally leaving retail brokers out of their upcoming meeting on stock market reforms. The group will meet four times a year and review old rules and advice the SEC on new regulation. Retail brokers are confused because the SEC has always made it a priority to protect retail investors so leaving retail brokers out of this advising group is raising questions. This brokerdealer.com update is courtesy of Reuters’ John McCrank in his article, “SEC’s stock market reform club locks out retail brokers” with an excerpt below.

The U.S. Securities and Exchange Commission is convening a group of financial industry veterans for the first time next month to consider stock market reforms, but one group will be conspicuously absent: retail brokerages.

The SEC’s 17-member Market Structure Advisory Committee includes representatives of fund companies, an exchange, off-exchange trading venues, dealers, and academia, among others. The group, which meets four times a year, will review old rules, and advise the SEC on a range of new regulations designed to make sure the market is as stable and fair as possible.

Still, given that the SEC has said its main priority is to protect retail investors, the omission of retail brokers raises questions, because without their point of view the panel may recommend changes that favor institutional investors, analysts said. Retail investors place around 16 percent of all U.S. stock orders.

“There’s a missing gap of protecting retail order flow,” said Larry Tabb, chief executive of capital markets advisory firm TABB Group.

That gap was also noticed by committee member Joseph Ratterman, chairman of No. 2 U.S. exchange operator BATS Global Markets. He said he mentioned his concern to SEC Chair Mary Jo White shortly after the committee was announced and that she was supportive of him, along with committee member Jamil Nazarali, from market making firm Citadel Securities, formally representing retail interests.

To continue reading this article from Reuters, click here.

Investors Gone Wild? Consumer Groups Think So

Posted on March 16, 2015 by admin

Brokerdealer.com blog update courtesy of InvestmentNews’ Mark Schoeff Jr.’s 12 March article “Consumer groups accuse SEC of ignoring investors”. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation’s stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

The Securities and Exchange Commission is not fulfilling its duty to protect retail investors, particularly in how it regulates financial advisers, a number of consumer groups asserted in a letter to the agency.

The eight-page letter dated March 10 outlines several areas that the groups say the SEC “can no longer afford to relegate … to a back burner.”

Most of the letter concentrates on ways the groups want the agency to improve regulation of financial advisers and urged the SEC to take “concrete steps” to raise investment-advice standards for brokers.

The Dodd-Frank law gave the SEC the authority to promulgate a uniform fiduciary standard for retail investment advice that would require all advisers to act in the best interests of their clients. The SEC has not acted. Meanwhile, the Department of Labor is poised to re-propose its own fiduciary-duty rule for advice to retirement accounts.

The topic has split the five-member commission. Chairwoman Mary Jo White has promised since November to make her position on fiduciary duty known in the “short term.”

Duane Thompson, senior policy adviser for Fi360, a fiduciary-duty training firm, agreed with the consumer groups that fiduciary duty has languished.

“The SEC seems to have looked more at capital-formation issues,” Mr. Thompson said. “The elephant in the living room is the uniform fiduciary standard. While Mary Jo White has repeatedly said it’s a priority, I’ve never seen it show up on the SEC’s regulatory agenda.”

Other topics the letter highlights include strengthening financial adviser disclosure about conflicts and compensation, reforming revenue-sharing, limiting mandatory arbitration for investor disputes, and beefing up regulation of risky financial products, including some kinds of exchange-traded funds.

“We are concerned that the Securities and Exchange Commission — which has always prided itself on serving as ‘the investors’ advocate’ — appears in recent years to have strayed from its primary focus on its investor protection mission,” the letter stated. “Given the vital role that average investors play in our markets and the overall economy, and the serious shortcomings that exist in the regulatory protections they receive, it is time in our view for these issues to be prioritized.”

Click here to read the entire article from InvestmentNews.

Nigerian Stock Market offers Remote Trading

Posted on August 13, 2014 by admin

BrokerDealer.com blog update courtesy of extracts from ThisDayLive.com

Often referred to as alternative trading system, electronic communication network has revolutionised trading on stock exchanges around the world. Despite initial apathy, dealing member firms of the Nigerian Stock Exchange are now embracing remote trading in a bid to woo retail investors writes, Eromosele Abiodun.

Following the introduction of technology, stock markets around the world have grown in leaps and bounds. The Nigerian stock market is a special example of the extent institutions can go if the right steps are taken in the right direction.

The impact of technology on the Nigeria stock market has been phenomenal, indicating the extent institutions can go when the right tools are employed. Technology indeed has taken control of the guts of business and made it possible for tiny, agile companies and stockbroking firms to become contenders. Continue reading →