Wall Street Letter VOL. XLV, NO. 29 - Sept. 16, 2013 | Page 9

19 – 25 SEPTEMBER 2013

TECHNOLOGY

Security Traders Association predicts market structure review
eadership at the Security Traders Association is predicting the SEC may undertake a full review of US equity market structure within the coming year due to the changing of the guard at the top tier of the regulator, according to comments from STA execs during a media briefing last week. “In speaking with people at the SEC, they are very aware that there is an opportunity to improve the marketplace,” said Tom Carter, STA chairman and managing director at Jones Trading. “There might be some serious disequilibrium in some of the things wrought as a result of [Reg] NMS and ATS, and they have asked us, ‘What do you think?’ Trust me, the intellectual process has already begun.” Jim Toes, STA president, noted the SEC is going to become more proactive now that the marketplace is better equipped to handle a large changes to the national market system across the board. He added the industry is better off than it was when Reg NMS was first instated into the markets in 2007. “As an industry, we are better prepared for this type of a review because of our ability to garner empirical data, as well as an inclusion of the buyside, which is showing willingness to get

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involved. That wasn’t the case in the early 2000s.” Toes pointed out the landscape of the exchanges had relied on broker dealers, but the buyside has started to take pages out of the playbook of brokers, citing the opening of the IEX, which is owned by buyside players. He added this topic will be discussed during the opening of the 80th annual Market Structure Conference in Washington D.C., which starts on October 2, where SEC Chairman Mary Jo White will open for the event. Referencing the upcoming conference, Toes stated the organization will host panels comprised of participants from the buyside, sellside, and exchanges together as opposed to breaking them up by business model. “It is a conscious change. That the world is getting flatter, brokers are looking like exchanges, exchanges are looking like brokers,” said Toes. “It is all about getting diverse opinions on the issues.” John Nester, SEC spokesman, said market structure is always on the forefront of the regulator’s agenda. He added that the 2010 concept release on equity market structure still garners comments, the most recent of which was dated September 6.

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POST-TRADE

SEI anticipates growing demand for wealth management outsourcing
SEI is anticipating an increasing demand for outsourced services among firms in the wealth management industry, according to Al Chiaradonna, senior vicepresident overseeing the SEI Wealth Platform. He noted that the growing level of interest in these types of services, including the end-to-end client support, as well as support for infrastruc-

ture and operational needs, is due in part to several trends. Specifically, Chiaradonna said the costs to firms associated with managing increasing levels of regulation and increasing demands of their customer, as well as the increased level of acceptance for outsourcing and the pressure of aging infrastructure, are all driving these firms to consider their outsourcing choices. He noted in identifying the trends SEI is looking to be proactive in supporting firms with those needs. “We are not just selling, but we are looking for those institutions that have seen these trends and have an orientation towards the future and are willing to go through the changes necessary to mitigate the risk of those

trends and take advantage of the opportunities,” he added. The latest addition to SEI’s client base in the space is Israel Discount Bank of New York (IDB), which Chiaradonna said is part of a growing list of clients that the independent administrator is scheduled to install between now and mid-2014. Following the successful UK rollout in 2012 and the burgeoning US client base, he noted the plan for SEI is to continue to grow its reach in terms of the number and type of clients. “I think you will continue to see US land clients similar to [IDB], but as we evolve in the coming months in the US, we will probably begin to scale the size of institutions we continue to pursue,” he added.