Meeting Notes

Recent Capital Market Developments

Summary of the Presentation at the Cincinnati NIRI Chapter Meeting on May 20, 2014

The Cincinnati Tri-State Chapter of NIRI held its sixth meeting of the season on May 20, 2014. Intercontinental Exchange | NYSE sponsored the event, including an outstanding dinner at Carlo and Johnny. Richard Barry, Vice President and trading floor governor, and James Byrne, managing director - global corporate client group, Intercontinental Exchange | NYSE, made a presentation and led a discussion about High Frequency Trading (HFT) and the impact on the equities.

Below are several key points from the discussion.

  • Changes at the exchange
    • NYSE Euronext acquired by ICE
    • Spinning off Euronext in July
    • Technology business will be going away sooner rather than later
    • NYSE is the listings franchise
  • Market Update
    • Market is still receptive for IPOs
    • 2H 2014 depends on how the consumer is feeling
  • Market Structure
    • Y2K changed the dynamic of the market
      • Decimals were added
    • SEC – 2 rule changes
      • NMS – changed how markets moved
      • ATS - created a complex set of rules that are impossible to follow
  • High Frequency Trading
    • Technology
      • 1987 crash – due to lack of technology
      • 2010 flash crash – too much technology
    • Fragmented marketplace – increased volatility
    • Dark Pools are a bigger problem than HFT – because they are not regulated
    • A less transparent market is a bad thing
    • SEC is looking into how to correct HFT