09.26.2022 11 new Morning Note posts under Morning Note (10) and CAPIS Insights (1)

CAPIS Insights


CAPIS Insights

"CAPIS RECAP – Select Highlights from the 88th Annual STA Conference"

posted by CAPIS on 10/13/2021 at 9:22 am


10/13/2021 at 9:22 am


This article was penned by CAPIS


Were you able to attend last week’s 88th Annual Security Traders Association Annual Conference in Washington D.C.? Curious about the topics and discussions that took place?

CAPIS was there for the first in-person industry-wide STA confab since 2019 and presents a collection of select highlights and tidbits from the event.



Competitive Landscape between Brokers & Exchanges Panelists: Joe Mecane, Citadel Securities & Jonathan Kellner, MEMX Moderator: Kimberly Russell, SSGA

  • SSGA’s Russell – this year we saw days with levels of off exchange trading rising over 50 percent.
  • MEMX’s Kellner said he would like to see more trading flow come on exchange. He noted the importance of the public quote.
  • Mecane said Citadel wants Rule 605 reform but there are a number of issues “in the weeds” which results in Rule 605 underestimated price improvement.



Industry Update on T+1 Settlement Panelists: John Abel, DTCC & Bob Walley, Deloitte Moderator: Tom Price, SIFMA

  • DTCC’s Abel said T+0 means either real time gross settlement or end of day settlement – and there is scant interest for real time gross settlement.



Doug Cifu, CEO, Virtu Financial Moderator: Tim Mahoney, Former CEO, BIDS Trading

  • Cifu stated that PFOF is an expense for Virtu – and that of the 250 platforms he does business with, 12 take a rebate
  • Citadel, Virtu, and Susquehanna all have the exact same PFOF to Schwab. Cifu added that while there are conflicts, they have been “wholly mitigated” through disclosures and flat payments.
  • Cifu said Rule 605 needs to be updated to include price improvement on odd lots and should be updated to reflect the price improvement provided by wholesalers.



Evolving Relationships Between ATS’s & the Buyside Panelists: Mehmet Kinak, T. Rowe Price & TR Lazo, BIDS Trading Moderator: Jessica D’Alton, UBS

  • CBOE’s Inzirillo said there is a lot to be done to level the playing field between exchange trading and off-exchange trading
  • Rowe’s Kinak said off-exchange trading is a way to keep anonymous order flow. He commented he does not have a strong interest in always interacting with retail. He concluded there are too many public exchanges.
  • UBS’ D’Alton noted there has started to be a deemphasis on speed in the industry.



ETFs: Current Landscape Panelists: Reggie Browne, GTS, Adam Gould, Tradeweb & Eric Pollackov, Invesco Moderator: Deborah Fuhr, ETFGI

  • Invesco’s Pollackov recounted proposed legislation to tax the “in-kind” transactions for ETF redemption, which currently are non-taxable events. He explained many people do not realize the average investor in an ETF lives under $400,000 a year in annual income, which is the threshold set by President Biden under which he will not increase taxes.
  • GTS’ Browne said this tax would directly impact new investors which have been coming into the market in droves during 2020. He wants this tax proposal killed.



Future of Electronic Trading Panelists: Dmitri Galinov, 24 Exchange & Troy Draizen, JonesTrading Moderator: Shane Swanson, Coalition Greenwich

  • Swanson said every part of the trade life cycle is moving closer to the cloud
  • Galinov said the cloud does not offer low latency solutions.

CAPIS Note:  Williams & Jensen notes contributed to this blog


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