Tag Archives: NYSE

betty-liu-nyse

Big Board Bets on former Bloomberg “Babe”: Betty Liu to Become Vice-Chair of NYSE

Bloomberg’s Betty Liu Moves to C-Suite Role at NYSE

(Original story from Traders Magazine – June 6- by John D’Antona Jr.)–The women’s movement continues at the U.S.’ NYSE, the oldest public stock exchange,  announced that former Bloomberg “babe” Betty Liu, who is also founder of financial content firm Radiate, Inc., will become Vice Chair of the NYSE, the global financial industry’s most famous bourse, a subsidiary of Intercontinental Exchange Inc. (MarketsMuse Senior Editor expresses warm note to Betty and re: the phrase used in quotes above is intended to be entirely respectful and complimentary –and not to be misconstrued as ‘not PC’ or to inspire a #MeToo moment)

Intercontinental Exchange, Inc., operator of the New York Stock Exchange, announced today that Betty Liu, an award-winning business journalist and entrepreneur, is joining the New York Stock Exchange as Executive Vice Chairwoman. Her appointment takes effect July 9. Liu will also join the NYSE Group Board.

betty-liu-nyse
Betty Liu, NYSE Co-Chairwoman

Liu is the Founder and CEO of corporate leadership advisory Radiate, Inc. and a 10-year veteran of Bloomberg Television, where she most recently co-anchored Bloomberg’s “Daybreak Asia” and “Daybreak Australia.” In her new role at NYSE Group, Liu will bring her global experience working with thought leaders, newsmakers and C-level executives to the Exchange. Working with NYSE President Stacey Cunningham and NYSE COO John Tuttle, along with the senior leadership teams of the NYSE and Intercontinental Exchange, Liu’s mission will focus on strengthening and building the NYSE leadership network, cultivating connections through live events and creating valuable opportunities for organizations to connect across the NYSE’s unmatched listed community of 2,400 leading global companies.

Liu will be joining the NYSE alongside its acquisition of Radiate, Inc., the company Liu founded in 2016 to empower emerging leaders with expert advice. ICE’s acquisition of Radiate is subject to customary approvals. When the deal is complete, Radiate’s team and content will become assets of the New York Stock Exchange and will be scaled across NYSE platforms. Radiate offers a library of more than 2,000 short-length video lessons taught by over 100 global CEOs and thought leaders. The Radiate platform, when it becomes a part of the NYSE, will add to the Exchange’s broad array of content and events. The transaction is expected to close in June and will not impact ICE’s 2018 results or capital return plans.

“Betty is a valuable addition to our leadership team, bringing her unique experience and perspective gained through her global postings and firsthand experience as a media entrepreneur,” said Stacey Cunningham, President of NYSE Group. “By working directly with the leadership of emerging and leading companies, and leveraging the Radiate platform, Betty will help us offer our customers even more opportunities to tap the NYSE network to connect and share ideas on our global stage.”

Liu’s years of international experience working for major news organizations include CNBC, Dow Jones, and the Financial Times. She has been stationed in Atlanta, Hong Kong and Taiwan on assignments.

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For the TradersMagazine story, click here

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ICE plan active ETFs

ICE Plans for More Active-Traded ETFs Put On Ice

The NYSE, a  division of Intercontinental Exchange (ICE) has encountered a slippery slope in the exchange’s effort to secure a bigger role in the ETF marketplace through a scheme that would expedite the creation of so-called actively-traded ETFs, which some MarketsMuse followers have dubbed ‘exchange-traded funds on testosterone.’

WSJ-The New York Stock Exchange this month withdrew a proposal to the Securities and Exchange Commission that would have expedited the regulatory approval of some exchange-traded funds, a setback for the fast-expanding ETF industry.

What the Intercontinental Exchange Inc. unit sought is known as a generic listing standard, which would have cut months off the process to list actively managed ETFs. Listing currently requires a fund-by-fund evaluation by the SEC that can take several months. The SEC reported the withdrawal on Oct. 19.

Generic listing standards for many index-based products, which seek to mimic the performance of a particular index, have slashed the time and cost of getting an exchange-traded fund to market, helping fuel a record number of new issuers this year.

The setback for efforts to secure similar standards for actively managed products highlights the limits facing the industry after years of rapid and broad growth.

The SEC declined to comment on the withdrawal. A person familiar with the process said there were concerns at the SEC about the open-ended use of derivatives that could occur if the rule were approved. A narrower proposal could limit the types of new funds or tools they use should the SEC eventually approve the listing standards.

For its part, NYSE still sees value in a faster approval process for these funds, an exchange spokeswoman said.

A person familiar with the matter said NYSE would tweak and refile the proposal.

“I think it’s the SEC being extra cautious,” said Todd Rosenbluth, head of ETF research at S&P Capital IQ. “I think they want to fully understand the risks that investors take on with these products.”

Exchange-traded funds hold baskets of stocks, bonds or other assets and trade on an exchange like a stock. Most are passive, with holdings dictated by the rules and weightings of the index they are designed to track. Actively managed products, in which a fund manager can change the holdings, account for only about 130 of the 1,787 exchange-traded products in the U.S., according to ETFGI, a London-based consulting firm. They have about $21.6 billion in assets, a fraction of the some $1.98 trillion in all exchange-traded products in the U.S.

But actively managed funds represent a frontier for ETFs, and exchanges are eager to speed up the process of listing them, particularly as the competition for listings heats up.

For the full story from WSJ, please click here.

What’s Next? A Real Trading Exchange for Crowdfund Industry

MarketsMuse FinTech curators feigned no surprise when noticing today’s announcement from the City of London profiling a new initiative just launched today that will accommodate equity crowdfund investors–a real, live exchange to trade out of equity crowdfund investments.

To paraphrase the opening observation from global crowdfund directory and search platform RaiseMoney.com

“…From the “What Will Those Finance Wonks Think of Next?! Dept,” City of London investors (and the thousands of bank trading desk folks plying their trades down near Canary Wharf) are now getting an exchange to trade crowdfunded investments, as the UK’s first crowdfunding marketplace launches today….

Not to be confused with the London Stock Exchange, or the ubiquitous NYSE, Crowdfunding platform Crowd2Fund is opening “The Exchange”, where investors will be able to sell off investments made in equity crowdfund deals and access their capital.

Crowd2Fund, which launched in late 2014, is an FCA-regulated platform specialising in revenue loans. But trading on the new marketplace won’t be limited to investments made on this platform – it’ll be opened up to exchanges of investments made on any crowdfunding campaign.

Peer-to-peer lending and crowdfunding is a booming part of London’s soaring FinTech sector. Crowdfunding campaigns grew a staggering 420 per cent in 2014, leaving the sector with growth of £1.74bn.

For the full story from RaiseMoney.com, please click here

Swimming With New Sharks: Kevin O’Leary Jumps into ETF Biz

How big are ETFs these days? Even Kevin O’Leary, aka “Mr. Wonderful” of ABC’s “Shark Tank” is getting into the game. On Tuesday, O’Leary was on the NYSE floor to launch the O’Shares FTSE US Quality Dividend ETF, (ARCA NYSE:OUSA): a basket of high-dividend stocks.

But he’s not doing this just to enter the crowded ETF space, which already has 1,700 ETFs and more than 50 ETF providers.

As noted by the coverage from CNBC, “Mr. Wonderful” is entering the exchange-traded fund world as an Issuer because he needed an investment vehicle for the equity portion of his family trust, which he started in 1997. O’Leary claims he wanted an investment vehicle that was rule-based, first and foremost, so no one would tinker with it.

And he wanted dividends. Why dividends? As O’Leary accurately opines, 70 percent of the returns in the stock market over the past decade or so have come from dividends.

But O’Leary did not just want to buy a basket of the highest-yielding ETFs. You can get that already with Vanguard High Dividend Yield, and you can get variations, like the iShares Select Dividend, that screen by dividend-per-share growth rate, or the Vanguard Dividend Appreciation ETF, which focuses on companies that have steadily increased dividends. O’Leary’s rule-based system is predicated on the following:

  1. A total yield close to 3 percent
  2. with 20 percent less volatility than the market
  3. with stocks that all had strong balance sheets

OUSA is therefore comprised of 140 stocks selected from the FTSE USA Index, comprised of 600 of the largest U.S. publicly-listed equities.

Given the high-profile presence and PR power of O’Leary, O’Shares made its debut on Tuesday in heavy volume. It’s the latest in a flurry of new ETF launches this month; now with 28 new funds, July is already tied for the most ETF launches of any month this year.

 

 

NYSE Proposal Would Lower ETF Listing Standards, Save You Months

MarketsMuse ETF update profiles an amended proposal by NYSE Arca to adopt generic listing standards for actively managed ETFs.

NYSE Arca asked the Securities and Exchange Commission to amend existing rules and cut out a key, time-intensive step fund companies must undertake to launch active ETFs. Such generic listings standards, which generally don’t apply to index-tracking ETFs, could reduce the time it takes to launch an active ETFs to mere months, from one year or longer.

The Proposed Rule would require an actively managed ETF that relies on the generic listing standards to disclose on its website certain information relating to the ETF’s holdings that form the basis for determining the ETF’s net asset value at the end of the business day.

ETF would have to disclose identifying and other information, specifically

  • The ticker symbol;
  • CUSIP or other identifier;
  • A description of the holding;
  • For derivatives, the identity of the security, commodity, index, or other asset on which the derivative is based;
  • For options, the strike price;
  • The quantity of each security or other asset held as measured by (i) par value, (ii) notional value, (iii) number of shares, (iv) number of contracts, and (v) number of units;
  • The maturity date;
  • The coupon rate;
  • The effective date;
  • The market value; and
  • The percentage weighting of the holding in the ETF’s portfolio

To read the full article, click here. 

Open Outcry Options Pit Trading is Dead..Long Live Open Outcry Options Pit Trading

MarketsMuse Strike Price update profiles a “return from the past and into the future” look at what many veteran (and former) option mart floor traders had all but given up for lost thanks to the electronification and bifurcation of institutional options trading.

We’re talking about those legacy, open-outcry trading pits, one -time bastions for burly and sharp-elbowed boys from Brooklyn and college ball-players-turned-options market makers and brokers who had reserved trading pit spots for them congregate and serve as liquidity centers for investors and upstairs traders to route and execute both small retail orders and large/complex institutional options orders. According to an article in today’s edition of the MarketsMedia.com newsletter, the options market is having a “Its Déjà vu all over again” moment.

Those who have been around for more than 15 minutes lament the fact that in recent years, those brick and mortar venues have become mere shells of their former selves and in some cases, ghost towns. The American Stock Exchange, arguably the pioneer in options pit trading, was acquired by the NYSE a few years back and is now literally a vacant lot that real estate developers hope to convert into a luxury rental and retail space. Beantown’s BOX might as well be a bowling alley, as trading via that venue is all electronic. One can hear a pin drop on the floor of the CBOE thanks to the ISE, the options market “Dominator” and a completely virtual exchange that has no physical structure other than corporate office space for their execs, and is otherwise comprised of air-conditioned warehouses patrolled by security dogs to protect rows of rack space for computer servers.

John Houlahan, OMEX Systems
John Houlahan, OMEX Systems

Noted John Houlhan, the COO of OMEX Systems, a long time, broker-favored OEMS platform (recently acquired by fintech firm Raptor Trading) and first designed exclusively for agency-only options and ETF floor brokerages operating on the AMEX and since embraced by a number of “upstairs” executing brokers, prop shops and select hedge funds, “Other than a handful of firms that were rolled up, most legacy floor brokerage firms and market-making firms turned in their trading smocks and floor badges long ago.” Added Houlahan, “The others who are relevant in the course of facilitating large block and/or complex options orders for institutional clients or hedge funds now generally operate from loft spaces in tony areas in Chicagoland, offices in various parts of Manhattan and New Jersey offices adjacent to exchange co-location areas.”

BUT WAIT! Everything you just read in that last paragraph is not entirely true; open outcry options trading floors are as relevant as ever, according to coverage from financial media firm MarketsMedia.com.. Here’s an extract from today’s edition of their newsletter, including a look at select veteran options market brokers who have lived to tell the tale… Continue reading

An ETF-only Exchange? BATS at Bat

They say you should always shoot for the moon and that is exactly what BATs exchange is doing. MarketMuse update profiles BATS exchange looks to hit it out of Nasdaq’s and the New York Stock Exchange’s parks. The ETF-only exchange out of Kansas City, BATS, is planning on becoming the number one ETF trading venue by 2020 which means passing both the Nasdaq and the NYSE. BATS. This MarketMuse update is courtesy of Tom Lydon’s article “BATS Looks to be Dominant ETF Exchange” on ETFTrends.com. An excerpt from the article is below.

ETFTrends-logo   Most exchange traded products in the U.S. trade on the New York Stock Exchange or the or the Nasdaq Global Market. That is not stopping Kansas City-based BATS Global Markets from the ambitious goal of being the largest U.S. ETF listing venue in three to five years.

“There was a total of 1,411 U.S.-domiciled ETFs at the end of 2014, according to the Investment Company Institute, with more than 1,000 listed by Intercontinental Exchange’s NYSE unit and the balance by Nasdaq OMX Group,” report John McCrank and Jessica Toonkel for Reuters.

To read the entire article from ETFTrends, click here

NASDAQ Challenges the NYSE to Run Dark Pools

MarketMuse update courtesy of Reuters in CNBC

The NYSE has recently come close to completing a deal with some big banks to take over running the banks’ dark pools. Now, NASDAQ is proposing an alternative solution as they eye running dark pools for banks as well.

Nasdaq OMX Group has approached several big banks with a proposal to take over the operation of their so-called “dark pools,” and plans to seek regulatory permission to do so, The Wall Street Journal reported, citing Nasdaq Chief Executive Robert Greifeld.

The new initiative was a response to the needs of the company’s customers and not a strategic change, the Journal quoted Greifeld as saying.

Exchanges have been losing market share to broker-run alternative trading systems, including “dark pools,” partly as brokers seek to avoid high exchange fees.

Dark pools are broker-run electronic trading venues, and several big banks have one. They allow investors to trade anonymously and only make trading data available after a trade, reducing the chance that others in the market will know about the buyer’s or seller’s intentions and move the price against them.

Dark pool venues have come under scrutiny amid concerns their unlit markets may drive too much volume away from traditional exchanges and make it hard for investors to see demand and potentially distorting prices.

Last month, Citigroup said it would shut down its alternative stock trading venue LavaFlow, at a time when regulatory scrutiny has increased around broker-run trading platforms, forcing banks to rethink the costs. Wells Fargo shut its dark pool in October, citing a lack of customer demand.

Banks’ “costs are skyrocketing and our job is figuring out how we can help them solve that problem,” Greifeld told the Journal.

Using its technology, surveillance software and regulatory expertise, Nasdaq can manage dark pools on behalf of banks, still allowing them to trade at lower prices than they do on exchanges and letting bank customers trade anonymously, the newspaper reported.

A final business product hasn’t been completed and plans may change, the Journal said.

Representatives at the Nasdaq were not immediately available for comment outside regular U.S. business hours.

The U.S. Securities and Exchange Commission Chair Mary Jo White announced last year that she planned to propose new rules that would require alternative trading platform operators to disclose more details to the public about the way they operate.

For the original article, click here.

The Man Who Is Transforming Equities Market Structure: Dark Pool Killer Targets Maker-Taker

For those who might have missed it, Jeffrey Sprecher (pictured above), the CEO of Intercontinental Exchange, which owns the NYSE, is determined to put the genie back in the bottle by turning back the market structure changes that have taken place over the past 10 years, including the surge of “dark pools” hosted by leading investment banks which internalized all institutional order flow and the dominant use of complex “maker-taker” fee models that exchanges have provided as a means of capturing order flow to their venues.

genie-bottle-blue-smokeAs reported by the WSJ  2 days ago, Sprecher has been negotiating with all of the major banks that operate dark pools and offering a %90 reduction on NYSE exchange fees if those banks will send the order flow back to the NYSE. According to the latest news, those banks are apparently on-board with the notion proposed by Sprecher, yet KCG, the group formed by Getco and the former Knight Capital, a major “market-maker” is opposed.

Here’s an excerpt from the story by WSJ’s Bradley Hope and Scott Patterson:

“..Under the proposal, the NYSE would drop the fee for trading stocks at its exchanges to five cents per 100 shares from 30 cents per 100 shares, the people say. Banks, in turn, would accept a rule known as “trade at” that would give more precedence to the stock exchanges for most orders. A trade-at rule would mandate that stock trades take place on exchanges unless private venues offered a better price. Advocates of the rule say it would force a significant chunk of the stock trades that occur away from exchanges back onto them.

Credit Suisse AG, which operates the largest dark pool in the world, has endorsed the proposal, according to a person familiar with the matter.

Goldman Sachs Group Inc., Morgan Stanley, Deutsche Bank AG, J.P. Morgan Chase & Co., and UBS AG—which are among firms expected to be affected by the proposal—declined to comment.

“We’re actively involved in discussions with ICE and we are optimistic about the proposal yielding positive results,” said Jamie Selway, a managing director at Investment Technology Group Inc., a brokerage that operates a dark pool.

Last month, Nasdaq announced it was drafting a pilot program that would test the effect of lowering trading fees on a group of stocks. The pilot is scheduled to begin in February.

The NYSE proposal would require approval by the Securities and Exchange Commission and is likely to face opposition. Among the critics is KCG Holdings Inc., a brokerage firm that operates dark pools and a business that matches up retail stock trades.

“Mandating trading on exchanges is an elephant-gun approach motivated by commercial interests of a handful of market participants,” KCG said in a statement Wednesday.

The ICE proposal has been in the works for more than a year, according to people familiar with the situation.

Mr. Sprecher and Thomas Farley , the ICE executive appointed as president of NYSE Group, began discussing a variety of changes to their markets, including a reduction in fees, with Wall Street firms about nine months ago, according to a person close to the discussions. The goal was to try to get long-term investors such as mutual funds, as well as banks and high-frequency traders, to unite behind a broad restructuring of the market that included lower fees, the person said. Credit Suisse became more deeply involved in the discussions several months ago, the person said.”

 

The full WSJ story is here

 

Exchanges Duel With Newcomers Over Trading Transparency; Payment for Order Flow Debate

 

June 26, By Nathaniel Popper

MarketsMuse Editor Note: In what might prove to be the catalyst for even greater scrutiny of securities industry practices re market transparency, below extracts of article from front page of NY Times June 26 Business Section i.e. profile “lit” v. “dark” liquidity centers–and the nuances by which investor order flow is administered, and the impact on market integrity makes for a good read.

While most people trading stocks at home imagine their orders zipping from their brokers onto one of the nation’s stock exchanges, almost none of the trades go anywhere near those public markets.

In reality, most trades placed through online brokers like TD Ameritrade and Scottrade are sold to Wall Street firms, which accumulate and trade against tens of millions of these shares a day, rather than send them to a regulated exchange like Nasdaq or the New York Stock Exchange. The Wall Street firms then quickly flip them and turn an easy profit because they have more resources and market knowledge than mom-and-pop investors.

The trading, which takes place away from the gaze of regulators and the public in what are known as the dark markets, has taken off in recent years and steadily eaten into the portion of all stock trading that takes place on the public exchanges. Now, though, the exchanges are fighting back by looking to create dark markets of their own.

NYSE Euronext, the company that owns the exchange, is asking regulators to approve a new platform that would attract orders from ordinary investors and then divert them away from the normal exchange with the aim of getting the investor a better price. Nasdaq and the exchange company Direct Edge said they have similar plans in the works.

The proposal looks like a technical tweak to help ordinary investors. But it has become the front line in a battle over what the nation’s stock markets should look like after nearly a decade of fragmentation has resulted in over a third of all stock trades occurring in the dark, up from 15 percent in 2008, according to Rosenblatt Securities, a brokerage firm.

In the past, the exchanges have pushed regulators to force the dark markets to become better lit, but James Allen, the head of capital markets policy for the CFA Institute, said that with the new proposals the exchanges are acknowledging “that if you can’t beat them, join them.”

The practice [payment for order flow] took off after a series of regulatory changes over the last decade made it easier to trade off exchanges and more expensive to trade on exchanges. Today, four firms — Knight Capital Group, UBS, Citigroup and Citadel — have made a business out of paying for retail trades and trading against them. These firms generally pay retail brokers 15 cents for every 100 shares they are sent to trade against, industry experts say.

“…The retail brokers contend that the internalizers allow them to get the quickest and best execution for their customers…” Continue reading