Speech by SEC Commissioner:
Statement at Open Meeting
Commissioner Kathleen L. Casey
U.S. Securities and Exchange Commission
January 13, 2010
Thank you, Madam Chairman. I support publishing this concept release on high frequency trading, order routing, linkages, undisplayed liquidity, and other market structure issues. The staff has done outstanding work — fair and balanced — in describing the legal and factual elements of the current equity market structure, and in soliciting comment on the wide range of issues implicated in this debate. And I appreciate the ninety-day comment period.
The release indicates that the Commission is conducting a comprehensive review of equity market structure, and "recognizes that market structure issues are complex and require a broad understanding of statutory requirements, economic principles, and practical trading considerations. Given this complexity, the Commission believes that its review would be greatly assisted by receiving the benefit of public comment on a broad range of market structure issues." The release goes on to say that the Commission is looking for "as much data and analysis" as possible to support commenters' views.
I enthusiastically support all of those sentiments. Despite our earlier venture into some of these related market structure issues, I am pleased that we now will have the benefit of reviewing comments from all types of investors, comments that hopefully are supported by rigorous analysis and economic data. Such a thoughtful and deliberative process will provide the Commission with the opportunity to develop a holistic view of the relevant statutory requirements, economic principles, and trading practice that is necessary to understand the full impact of the proposals that have already been published for comment.
But I would like to reiterate my earlier comment that rushing to pass new regulations prior to a careful and thorough review of all the comments we receive on this concept release could amount to a potentially devastating mistake with far-reaching implications for the Commission. To do otherwise would reflect, in my view, blatant disregard for the law of unintended consequences.
Thanks again to the staff, particularly Dan Gray, for the tremendous professionalism reflected in this concept release. I have a few questions.