Conference Call: High Frequency Trading and Market Structure Reform

Wednesday, February 4th at 11:00 AM EST

On February 4th at 11:00 AM EST, Capital Alpha Partners is hosting a conference call regarding high frequency trading and market structure reforms that may alter the business models for exchanges, brokers and HFT firms. 

Joining Capital Alpha's Joseph Engelhard are special guests Christopher Nagy, Founder and CEO of KOR Group LLC and David Lauer, a former high frequency trader and Founder of Healthy Markets, a market reform group seeking consensus reforms to improve market efficiency and fairness. The call will cover ten likely policy developments in 2015, including their predictions on the following areas:

1. Rolling back Dodd-Frank – With Republicans taking over the Senate and retaining control of the House, Dodd-Frank rollback is likely and already underway. While Chris and Dave don’t see a full rollback, they expect regulators to peel back some of the Swap rules and continue their push to water down certain aspects of the rule.
2. Tick Pilot – The SEC is under tremendous pressure from Congress to roll out the Tick Pilot and with the comment period for the published rule having ended in December of 2014, we’ll see a finalized version of the rule in 2015, albeit a scaled back version.
3. Continued ATS demise – Given increased scrutiny, the ATS consolidation and closure trend will likely continue into 2015.
4. Best Execution – With FINRA and SEC investigations into Best Execution, we will see fines and censures on Best Execution for the first time in 6 years.
5. Reduced Access Fees and scaling back Maker Taker – The announcement of ICE’s Grand Bargain and a BATS reform calling for lower access fees (see “A Grand Bargin, Not so fast“) will both very likely come into play in 2015.
6. IEX Exchange Application – 2015 could well be the year the Upstart ATS files to become an exchange operator.
7. Sale of the NYSE – This is a very real possibility and could happen as early as this year.
8. Proposed Trade-At in Active securities – In conjunction with a reduction in Maker Taker fees, there is high probability that the SEC may propose a “Trade-at” test in a handful of actively traded stocks.
9. 605/606 reform – Low hanging fruit for the SEC, they expect that reform of order disclosure rules 605 and 606 will be proposed in 2015 (See KOR 605/606 reform comments).
10.  HFT – HFT will be further defined in 2015. Likewise, definitions of what liquidity provisioning is will become clearer this year. They also anticipate increased disclosure from ATS operators.

Call in details were provided to clients of Capital Alpha Partners. If you are interested in participating in this call, please contact Rich Linville, Tom Butler or Courtney Oldham (Europe) for more information.

A replay will be available after the conference call.

More on Christopher Nagy and Dave Lauer

Christopher Nagy is Founder & CEO of KOR Group LLC and has significant expertise in retail trading and US market-structure. Chris, a 25-year veteran of Wall Street, was previously the managing director of order routing, sales strategy and market-data strategy at TD Ameritrade where his responsibilities included developing and implementing best execution, routing technology and execution analytics, as well as developing routing and execution strategy. During his 12+ years with TD Ameritrade, Chris also co-headed the firm's government relations efforts. Chris has also worked with US Bank, MJK and Sherson Lehman Brothers. Chris has served on a multitude of industry committees and exchange boards. Chris served on the board of the Philadelphia Stock Exchange as the off-floor vice chairman from 2000-2004, the NYSE AMEX Options Exchange Board from 2010-2012, the NASDAQ Quality of Markets Committee, the Security Traders Association Trading Issues Committee, the Options Industry Council Roundtable. Chris was chairman of the SIFMA Options Committee from 2005-2007. Chris currently serves on the FINRA Uniform Practice Code Committee.  Chris also holds his FINRA Series, 4, 7, 24, 53,55, 63 Licenses, is a registered lobbyist, and is a graduate of the Securities Industry Institute Wharton Program.

Dave Lauer is President & Managing Partner of KOR Group LLC, specializing in Market Structure and Technology. Dave has extensive experience designing and building the infrastructure that underpins many modern electronic trading systems and several years experience as a quantitative analyst and trader on high-frequency trading desks. Dave's current work focuses on massively scalable technology, predictive analytics, complex systems design and consultation for organizations working to better understand and navigate modern equity markets. Dave's previous work includes technology architecture at Verdande Finance and IEX Group, public advocacy at Better Markets and electronic trading at Allston Trading and Citadel Investment Group. Dave was also an early employee at Tervela in its formative stages. In his spare time, Dave collaborates on the maintenance and advancement of Cowbird.com, an innovative online photo-narrative storytelling network. Dave sits on several for-profit and non-profit boards. Dave is also a registered lobbyist.