By Herbert Lash
The head of the Securities and Exchange Commission, Mary Jo White, is on board with calls for a broad review of the framework of the U.S. equity market, which has been roiled by software glitches over the past year, an SEC commissioner said on Monday.
White, who took over the SEC in February, has not discussed the issue in detail and nothing concrete has been decided, Commissioner Daniel Gallagher said after 20 industry officials discussed equity market structure at a roundtable.
"We haven't talked too much in depth on market structure issues," Gallagher said. "I know that she is on board with the idea that it is a huge issue and we need to resource it and come up with a plan.
"We have to do a holistic review. Nobody is arguing against it," said Gallagher, who had urged a wide-ranging review of the U.S. equity marketplace in a widely commented speech in October.
Monday's roundtable was convened by Representative Scott Garrett, a Republican from New Jersey who chairs the House of Representatives Subcommittee on Capital Markets and Government-Sponsored Enterprises.
Garrett said the roundtable aimed to facilitate a better understanding of potential market reforms. In comments last week Garrett said he hoped the roundtable would serve as the beginning of a longer-term conversation about reform.
"A broad, holistic review could help policy makers identify potential changes that need to be made to help lead to more efficient markets, less investor confusion, better competition, and increased job creation," he said.
Gallagher in October questioned whether for-profit exchanges should remain self-regulatory organizations, or SROs, even though they outsource the bulk of their regulatory duties.
Gallagher said on Monday that SROs are like a "spine" that runs through the market structure debate.
"I don't think it's a conflict necessarily, I just think it's a matter of what works best," he said. "At the SEC you have to sit back and say to yourself, 'Does this make sense?' and I think self regulation plays right into that."