EMA releases whitepaper on importance of market data to investors, regulators

The market data used by professional and nonprofessional investors – as well as by federal regulators – is a critical component to the transparency of U.S. equity markets, according to a new report by the Equity Markets Association (EMA), an industry association representing the interests of U.S. exchanges.

In a whitepaper issued for federal policymakers, the EMA report provides an overview of market data’s role in the U.S. capital markets, including identifying different types of market data, the role of consolidated Security Information Processor (SIP) market data, and the responsibility for and governance of SIPs.

The full report, “The Importance of Market Data to the U.S. Equity Markets,” can be accessed by clicking here

EMA was established in 2015 to provide federal policymakers, regulators and investors with in-depth policy analysis on important issues that impact the U.S. equity markets. Founded by Intercontinental Exchange, Inc., which operates the New York Stock Exchange (NYSE) Group of exchanges, NASDAQ, EMA promotes federal policies that safeguard a transparent marketplace, incentivize capital formation and ensure a robust secondary market for securities trading.

Previous published EMA reports include “The Anatomy of a Trade,” designed to provide policymakers with visibility into how trades are executed, from retail investors trading through online services to market makers. Stacey Cunningham, chief operating officer of the NYSE Group, and Frank Hatheway, NASDAQ’s chief economist, led separate discussions earlier this year for the staffs of the House Financial Services Committee and the Senate Banking Committee on the mechanics of how trade orders are executed.

EMA is led by co-directors former Rep. Mike Ferguson and Mike Williams. Ferguson leads the federal policy practice at Baker Hostetler LLP. Williams is the founder of The Williams Group.

EMA hosts congressional staff briefing on ‘Anatomy of a Trade’

Leading the discussion of the Equity Markets Association congressional staff briefing were Frank Hatheway of NASDAQ (left) and Stacey Cunningham of the NYSE Group.

Leading the discussion of the Equity Markets Association congressional staff briefing were Frank Hatheway of NASDAQ (left) and Stacey Cunningham of the NYSE Group.

A fair and transparent marketplace open to all investors is key to ensuring companies can access the capital they need to expand their businesses and create jobs, two market officials said Wednesday at a congressional staff briefing.

The briefing was hosted by the Equity Markets Association, on which Intercontinental Exchange, Inc., the parent company of NYSE Group, and NASDAQ are founding members. More than 5,000 companies are publically traded on the EMA members’ exchanges.

Click here to download the PowerPoint distributed to congressional staff during the briefing for staff of the House Financial Services Committee and staff of lawmakers who serve on the committee. The briefing, “Anatomy of a Trade,” was designed to provide staff with visibility into how trades are executed, from retail investors trading through online services to market makers.

Stacey Cunningham, chief operating officer of the NYSE Group, and Frank Hatheway, NASDAQ’s chief economist, led the discussion into the mechanics of how trade orders are executed. 

“We’re all fundamentally in the trust business,” Hatheway said. “Stock markets should work for all investors, and you shouldn’t have to be sophisticated to benefit from them.”

Cunningham said it’s incumbent on the exchanges to be transparent and educate consumers – as well as federal policymakers – to ensure investors can effectively participate in the market.

Michael Williams (left) and former Congressman Mike Ferguson participated in the Equity Markets Association congressional staff briefing. Ferguson and Williams serve as EMA co-directors.

Michael Williams (left) and former Congressman Mike Ferguson participated in the Equity Markets Association congressional staff briefing. Ferguson and Williams serve as EMA co-directors.

“Because of the complex systems involved in trading equities, it’s important that we educate consumers,” Cunningham said. “Transparency and openness helps to protect investors, especially those who may not have specialized knowledge.”

EMA co-directors former Congressman Mike Ferguson and Michael Williams also participated in the briefing. 

In additional to providing congressional staff with an overview of U.S. equity markets, the briefing also focused on market participants, regulatory structure and how trade orders are executed.

This was the first of a series of EMA-hosted briefings for congressional staff. Additional briefings will focus on the role of a self-regulatory organization, market data, the impact of a financial transaction tax and cybersecurity issues.

EMA founders urge Congress to oppose adding non-SROs as voting members of NMS plans

The two founding members of the Equity Markets Association urged key congressional leaders to oppose legislation that would add non-Self-Regulatory Organizations as voting members of National Market Systems plans.
 
The Equity Markets Association was established in 2015 to provide federal policymakers, regulators and investors with in-depth analysis on important issues that impact the U.S. equity markets. Its founders, Intercontinental Exchange, Inc. and NASDAQ, wrote to House Financial Services Committee Chairman Jeb Hensarling and Rep. Maxine Waters, the top Democrat on the committee, about legislation that would change how NMS plans operate.
 
Also signing the letter were the Chicago Board Options Exchange, Inc., the Chicago Stock Exchange, Inc., the International Securities Exchange, Inc., and the Options Clearing Corporation.
 

The letter can be downloaded here  →

New Equity Markets Association to provide voice on financial markets policies and issues

Washington, D.C., December 15, 2015 – The Equity Markets Association, a cooperative whose mission is to regularly provide policy makers, regulators and market participants with perspectives on important issues that impact the equity markets, launched today. The initial members of the Association are Nasdaq and the New York Stock Exchange, the primary exchange venues in the United States for the listing and trading of approximately 5,000 public companies. In conjunction with the launch, the Association released its inaugural white paper focused on the role equity markets play and a discussion of key market structure issues.

The Association, based in Washington, D.C., is led by former Congressman Mike Ferguson of Ferguson Strategies, and Michael Williams of The Williams Group.   

Serving in Congress from 2001 to 2009, Ferguson represented New Jersey’s 7th District and served on the Energy and Commerce Committee and House Financial Services Committee. He also worked on the drafting of the Sarbanes-Oxley Act of 2002.  

In addition to holding senior public policy roles for Credit Suisse and the Securities Industry and Financial Markets Association (SIFMA), Williams served as Special Assistant to the President and Staff Director for Legislative Affairs during the Clinton Administration, where he was a key member of the White House team responsible for developing and implementing the Administration’s agenda on financial services, tax and international trade legislation. 

“This Association will be an important voice on issues that impact the nation’s capital markets,” said Ferguson. “Exchanges play a unique role in the capital markets and EMA will now provide policy makers with exchange perspectives on important issues impacting investors, issuers and equity market intermediaries.”  

“Exchanges are economic engines of our economy, vital to growth and job creation,” said Williams. “The EMA will allow us to share deeper insights with opinion leaders regarding the operation of the capital markets in the context of policy and regulation.”