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Remarks at the Inaugural SEC Equity Market Structure Advisory Committee Meeting

Commissioner Michael S. Piwowar

May 13, 2015

Good morning and welcome.

I echo Chair White and my fellow Commissioners in thanking everyone assembled for this inaugural meeting of the Equity Market Structure Advisory Committee (“Committee”). And a special thank you to each of the Committee members for agreeing to serve and the panelists for participating today.

Notwithstanding our standard disclaimer that the views I express do not necessarily reflect the views of my fellow commissioners, I think I can safely say all of us are pleased we are commencing a discussion of equity market structure issues. Each of us has been highlighting for some time the need to focus our attention on equity market structure,[1] and I personally have been eager to get a comprehensive and substantive review underway.[2] Today’s event is a good step forward.

As has already been noted, the focus of today’s meeting is Rule 611 of Regulation NMS. It is an important rule that is a central aspect of our current equity market structure, and thus is a perfectly reasonable starting point for the Committee’s review. But in the future I would propose that, rather than have the Commission dictate a particular rule or issue for discussion at these meetings, we let the Committee members themselves identify and prioritize the equity market structure topics to be analyzed in this forum. The Committee should not just propose items for the agenda; my preference would be for the Committee to control the agenda.[3] We are fortunate to have assembled this distinguished and diverse group of individuals, and I would hate for us to squander their expertise by artificially limiting the issues on which the Committee can opine.

There is simply no substitute for the insights that come with living and breathing the complexities and challenges of the market. The Committee members each have unique perspectives on these complexities and challenges, and we should let that collective experience guide the work of the Committee. Furthermore, having the Commission sequence meeting topics, such as by proceeding rule-by-rule, creates the possibility that we will get lost in the proverbial forest by looking only at the trees. Let’s hand over the compass to the talented members of the Committee.

The dialogue we begin today is inherently forward-looking, focused on how we can enhance the current equity market structure. However, it is important for this discussion to be grounded in the appropriate historical context. When Regulation NMS was adopted, there was uniform support for enhancing the efficiency of our markets. But what may have been forgotten in the intervening decade is that the means by which the Commission sought to achieve that goal was quite controversial. The rulemaking was approved by a 3-2 vote, with the dissenting Commissioners taking the unusual step of having their joint statement published in the Federal Register.[4] That lengthy dissenting statement was principally focused on the trade-through rule — the topic in the spotlight today. I implore you to take the thoughtfully articulated views of then-Commissioners Cynthia Glassman and Paul Atkins into account as you think through the difficult issues related to the trade-through rule and equity market structure more generally. With the benefit of ten years of experience, we should measure the impact of Regulation NMS (and our other rules and regulations), as well as any potential changes, against the goals and concerns that were articulated at the time it was adopted.

I hope that today’s discussion, and those that follow, will be robust and animated. I expect that we will hear differing opinions on the issues; I would be disappointed if we did not. We need the benefit of all of your views to fully achieve our objective of developing a better understanding of the equity markets and laying the groundwork for future regulatory efforts to enhance those markets. On this point, I am not limiting my remarks to the members of the Committee. The Committee is necessarily limited in size, but its composition should not be to the exclusion of other perspectives. I hope that everyone in the room today, people watching by webcast, and additional interested parties will provide meaningful feedback on the issues we discuss, or those that we have failed to address.

With that, I will turn it back over to the Chair for the reason we have gathered — to hear from all of you. I look forward to a lively discussion.

Thank you.

[1] See, e.g., Focusing on Fundamentals: The Path to Address Equity Market Structure, Speech by Chair Mary Jo White at the Security Traders Association 80th Annual Market Structure Conference (Oct. 2, 2013), available at; Seeing Capital Markets Through Investor Eyes, Speech by Commissioner Luis A. Aguilar at the Consumer Federation of America’s 26th Annual Conference (Dec. 5, 2013), available at; Market 2012: Time for a Fresh Look at Equity Market Structure and Self-Regulation, Speech by Commissioner Daniel M. Gallagher at SIFMA’s 15th Annual Market Structure Conference (Oct. 4, 2012), available at; Remarks before Trader Forum 2014 Equity Trading Summit, Speech by Commissioner Kara M. Stein (Feb. 6, 2014), available at

[2] See Remarks at the University of Notre Dame, Mendoza College of Business, Center for the Study of Financial Regulation, Speech by Commissioner Michael S. Piwowar (Mar. 13, 2015), available at

[3] Likewise, we should defer to the Committee on its structure. For instance, the Committee should consider whether, under Section V of the proposed bylaws, it is advisable to appoint a Chair and convene subcommittees.

[4] Regulation NMS—Regulation of the National Market System, 70 F.R. 37496 (June 29, 2005) at 37632 et seq. (Dissent of Commissioners Cynthia A. Glassman and Paul S. Atkins to the Adoption of Regulation NMS). The dissent is also available at

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