TabbForum, a publication that caters to the institutional investment community and works towards spotlighting the relevant issues of the day, has just published a comment letter submitted to the SEC by institutional [agency-only] broker Themis Trading re: topic of wider tick sizes for small cap stocks. While readers of this blog are most-focused on ETFs, options and macro strategies (and less on small caps), the Jan 27 submission letter included a comment from Themis execs that more than a few industry members might consider “incendiary,” as it challenges the core business models of the largest retail brokerage platforms and the assortment of “exchanges” who profit from today’s market fragmentation. On the other hand, the lens that agency-only brokers peer through is different from the colored glasses that those with inherent conflicts use. Here’s the quote:
“..we believe that if the order routing and execution process were not distorted by payment-for-order-flow, then the price discovery process would be cleaner, and displayed limit orders would be encouraged, and not disadvantaged..”
Click on the above TabbForum logo to read the full article (subscription required, but registration is free!)