Bursa Malaysia Berhad announced the appointment of Mr. William Francis Herder (Mr. Bill Herder) as the Independent Director to the Board of Directors of its subsidiaries, Bursa Malaysia Derivatives Berhad and its clearing house, Bursa Malaysia Derivatives Clearing Berhad (collectively referred to as Bursa Malaysia Derivatives Group), effective 2 June 2016.
read more...Bursa Malaysia Berhad Announces Appointment Of Director To Its Subsidiaries
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Understanding Personal Goals to Drive Team Performance
Several years ago, HBS Professor Amy Edmondson and I developed a simulation to teach about team decision making. The Everest Leadership and Team Simulation has become a common teaching tool at many business schools and executive education programs around the world. Interestingly, several scholars have used the simulation to study interesting questions about team dynamics. One such study was published recently in the Journal of Applied Psychology. The study, authored by Matthew Pearsall and Vijaya Venkataramani, examined teams of undergraduate business students as they tackled the simulation. The scholars wanted to explore the impact of team bonding and identification. Does coming together as a team and engaging in some team bonding have a big impact when tackling challenging tasks? After all, many organizations send teams off for bonding experiences of various kinds, thinking it will have a positive impact. Specifically, the scholars were interested in exploring teams where members also had strong personal goals, as well as a common goal that they were trying to achieve together. They recognized, as we did in developing our simulation, that balancing common and personal goals can be very challenging for many teams.
The scholars studied 56 teams of students, five students per team. The scholars asked each team to complete a team identification assessment after working together for eleven weeks. That assessment measured the extent to which members identified with the team, i.e. did they feel a strong a sense of belonging to the team. The teams also completed a team learning assessment. That tool measured "the extent to which team members were likely to learn about and understand each otherâs goals." One week later they engaged in an intervention with the 1/2 of the teams that were identified as having high team identification. The intervention served as a further effort to strengthen team identification and a sense of belonging. Here is what happened:
The scholars studied 56 teams of students, five students per team. The scholars asked each team to complete a team identification assessment after working together for eleven weeks. That assessment measured the extent to which members identified with the team, i.e. did they feel a strong a sense of belonging to the team. The teams also completed a team learning assessment. That tool measured "the extent to which team members were likely to learn about and understand each otherâs goals." One week later they engaged in an intervention with the 1/2 of the teams that were identified as having high team identification. The intervention served as a further effort to strengthen team identification and a sense of belonging. Here is what happened:
A week later, the 28 teams in the high team identification group got a brief lecture about the importance of team commitment and identification for effective performance. They then competed in a contest to see which team could build a paper airplane that flew the farthest. They also were asked to create a team name and make a banner or flag for their team.
Then all 56 teams participated in the Everest Leadership and Team Simulation that Amy and I developed. In the simulation, team members have some common goals and some personal goals that they would like to achieve. The inherent goal asymmetry means that you can't accomplish all the team and personal goals. Something has to give.
The scholars examined how the different teams performed. They also assessed the teams once again after they had completed the simulation. What did they find? Interestingly, the "high identification" teams did not do better than the other teams in the control group. How about team learning orientation? Did being oriented toward learning about one another's goals and interests help drive performance? Yes, it had a positive effect, but not a large one. The best teams scored highly on both team identification and team learning orientation. You need both to succeed. Yes, you need to bond with your team members and feel a sense of belonging. However, that only helps if part of that bonding and identification process involves trying to truly understand the goals and interests of other team members. At the end of the day, personal interests matter. We succeed as a team if we can help individual members achieve their goals. We can't simply ask members to put aside all personal goals for the sake of the team.
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Moscow Exchange Supervisory Board Appoints New Members To Committees
On 2 June 2016 Moscow Exchange (ticker MOEX) Supervisory Board named new members to its six committees.
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FINRA Fines E*Trade Securities LLC $900,000 For Supervisory Violations Related To Best Execution And Protection Of Customer Order Information
The Financial Industry Regulatory Authority (FINRA) announced today that it has censured and fined E*Trade Securities LLC $900,000 for failing to conduct an adequate review of the quality of execution of its customers’ orders and for supervisory deficiencies concerning the protection of customer order information.
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EBA Publishes Decision On Data For Supervisory Benchmarking
The European Banking Authority (EBA) published today its Decision on data for supervisory benchmarking. This Decision comes after the publication of the amended technical standards on benchmarking of internal approaches and requires Competent Authorities to submit data for the 2016 benchmarking exercise, focusing on High Default Portfolios and with reference to end-2015 data.
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Remarks Before The SEC Historical Society â âThe Continuous Process Of Optimizing The Equity Marketsâ
Thank you, David [Lynn], for that kind introduction and for inviting me to your annual meeting. It is truly my privilege and honor to serve as Chair of the Commission, and it is wonderful to share the room and microphone today with my friend and former Chairman Richard Breeden along with others who, from firsthand experience, deeply appreciate the value of the SEC as a critical institution with a long heritage of protecting investors and our markets. At the Commission, our history informs who we are and the work we do, and it is our great, good fortune that we have the SEC Historical Society to preserve that rich history.
As you know better than anyone, the SEC has a tradition of being home to some of the smartest, most remarkable people in government. The staff of this agency are among the most talented and dedicated people I have ever met. They are who make the SEC strong and the special place it is.
President Theodore Roosevelt once famously said, “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man [or woman] who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly…who spends himself [or herself] in a worthy cause.”[1]
And while the Commission has always had its share of critics over the years, they are no match for the tremendous public servants at the agency who have served and do serve in the arena, striving valiantly and successfully in the cause of protecting America’s investors and our markets. I know we have many current and future SEC alumni here and watching the webcast today, so I would just like to emphasize my gratitude to all of you for your service to and support for this renowned institution and the public interest.
As has become the custom here, I will give you a very brief report on some of the current work of the Commission. As you know, between the implementation of the Dodd-Frank and JOBS Acts, and advancing an important range of discretionary mission critical initiatives, the SEC has undertaken probably the most complex and daunting period of rulemakings in its history. In that regard, I am pleased to report that in May, we completed all of the JOBS Act rulemakings,[2] and we have now reached the final phase of implementing the Dodd-Frank Act as we work to complete all of the rules in the two major remaining areas on which we made great progress in 2015 and early 2016: security-based swaps and executive compensation. But, as you know, the SEC’s mission extends far beyond that. As the markets and investor needs evolve, we must constantly evaluate areas where we can better further our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. In other venues, I have recently detailed our progress on the ongoing modernization of the regulatory regime for the asset management industry and our disclosure effectiveness review, and extolled the record accomplishments of the Enforcement and Exam programs.[3]
Today, I thought would briefly update you on the status of our equity market structure agenda – not only because it has been a priority of mine and the agency for the past three-plus years, but also because it has been a priority for the Commission throughout its history, and always will be. That history began, of course, in 1934 with the adoption of the Exchange Act, which for the first time gave our newly created agency sweeping powers over securities trading in the secondary markets, including broad authority over the primary participants in that market: brokers, dealers, and national securities exchanges. And since the early twentieth century, the Commission has been engaged in an almost continuous review of equity market structure, constantly seeking ways to improve and optimize its operation. While I will not attempt a full historical tour today, I do want to mention a few highlights.
In 1971, the Commission, for example, issued the Institutional Investor Study, [4] finding that the markets had become increasingly complex and inefficient, due in part to exchange fixed commission schedules and institutional investor desire to avoid those commissions through direct trading relationships with broker-dealers. The market fragmentation noted in that study led the Commission to issue a Statement on the Future Structure of the Securities Markets in 1973 that advocated for a centralized market system.[5]
In the wake of those Commission actions in the early 1970s, Congress enacted the Securities Acts Amendments of 1975.[6] As you know, those amendments granted the Commission broad authority to establish a national market system with the specific (and sometimes competing) goals of promoting: (1) efficient execution of transactions; (2) fair competition among broker-dealers, exchange markets, and non-exchange markets; (3) the broad availability of quotes and transaction information; (4) the practicability of brokers executing investors’ orders in the best market; and (5) the opportunity for investors’ orders to be executed without the participation of a dealer. Despite the significant changes that have occurred in our markets since 1975, these same issues remain as relevant to our market structure today as they were in 1975.
The Commission used its new authority in 1975 to facilitate a national market system. Among other things, it abolished the long-standing fixed commission schedules and facilitated the creation of the consolidated market data plans that are still in use today. The Intermarket Trading System (ITS), an early predecessor of today’s Order Protection Rule, was also created to link various markets trading listed securities.
Of course, the markets evolved in response to these regulatory changes and advancements in technology, and the Commission again took stock of our market structure in the Market 2000 Report issued in 1994.[7] That study, which was initiated by former Chairman Breeden, analyzed structural issues that had existed in the markets since the passage of the Securities Act Amendments of 1975 and concluded that our equity market structure was sound, having benefited from enhancements in technology and competition that reduced trading costs, enhanced market transparency, and improved liquidity. It also included suggestions to further improve market transparency, competition, and the fair treatment of investors. That significant effort led to the Commissions’ order handling rules and the retail execution quality and order routing disclosure rules.
The Commission continued its review of equity market structure in a request for comment on market fragmentation issued in 2000.[8] In that action, the Commission solicited comments on a range of issues that included fragmentation, internalization practices, payment for order flow and best execution, and highlighted several potential options for addressing fragmentation. That effort culminated in the 2005 adoption of Regulation NMS, a landmark body of rules that govern all aspects of today’s national market system. Among these rules is Rule 611, the Order Protection Rule, which replaced the outdated ITS and, for the first time, required market participants to honor the best prices displayed in the national market system by automated trading centers. This established a critical linkage framework for the modern markets.
The Commission is now in the midst of another significant phase of market structure review, as technology advancements continue to accelerate the pace of change in how orders are generated and executed. While these advancements have generally served retail and institutional investor interests well, as I have remarked before, [9] it is critical that we, as regulators, keep pace with these changes with a keen focus on the fundamentals driving them.[10] We must fully understand the evolving marketplace, identify the issues with precision before making any fundamental changes, and assess the likely consequences that may follow.
The Commission’s continuing work in market structure is a substantial undertaking that requires updates in technology, and utilization of data and analytics to make informed decisions on enhancing market structure. That means new ways of using existing market data through tools like MIDAS, and it also means building new systems to provide even more powerful analytical capabilities for the Commission and our fellow regulators. That is why we have been moving forward on a proposed national market system plan to create a consolidated audit trail, which will be one of the world’s most comprehensive and sophisticated financial databases. That plan was put out for notice and comment in April and is expected to be finalized by the end of the year.
In addition to focusing on the need for robust data and enhanced regulatory capacity, through initiatives like MIDAS and CAT, I have also prioritized a number of other targeted initiatives to optimize our market structure—namely, ensuring the operational integrity of critical market infrastructures, enhancing market transparency and disclosures, and building more effective markets for smaller companies, to mention just a few.[11] More will follow.
We have made much progress across this agenda by improving market stability through initiatives such as Regulation SCI (Security Compliance and Integrity), which strengthened the technology infrastructure of the market and expanded Commission oversight of that technology. We have also worked closely with the exchanges to address issues like order types and operations, data feed disclosures, and “single points of failure” within infrastructure systems that have the ability to significantly disrupt trading. We and the SROs are also actively reviewing the operation of the limit up-limit down pilot plan, with a focus on issues that occurred during the volatile trading of August 24, 2015. This review has included extensive public analysis by SEC staff of that day’s events and the consideration of specific improvements to refine the plan’s operation.
We have also taken action to address enhanced market transparency and disclosure with our proposal last November to update Regulation ATS. This proposal is designed to shed light on dark pools and bring greater transparency about how ATSs operate, including the material conflicts of interests they can pose for investors and other market participants.[12] And, as a complement to the Regulation ATS proposal, I expect the Commission to consider very soon a proposal to provide customer-specific institutional order routing disclosures and targeted enhancements to existing order routing disclosures for retail customers. These two proposals would provide valuable new information to investors about how their orders our routed and executed in today’s markets.
We have also taken a significant step to do a data-driven assessment of how our market structure is working for smaller companies. In May 2015, the Commission approved a national market system plan for a two-year pilot program that will widen the minimum quoting and trading increments for stocks of smaller companies. This two-year pilot, which is scheduled to begin on October 3, 2016, will provide the Commission with valuable data on whether wider tick sizes would enhance the market quality for smaller company stocks for the benefit of issuers and investors.
In early 2015, as part of our broader market structure work, we created the Equity Market Structure Advisory Committee, comprised of diverse experts who consider specific initiatives and potential structural changes. The Committee was established to assist the Commission in its comprehensive review of the structure of the equity markets, and I have been very pleased with the progress of the Committee’s work over the past year. It is taking on the core issues that are key to our efforts to optimize our equity market structure. At their most recent meeting in April, for example, the Committee was presented with draft recommendations from two of their subcommittees for an access fee pilot and trading venue regulatory reforms. And I expect that the full Committee will vote soon on a formal access fee pilot recommendation.
As you can glean from my whirlwind summary of our market structure agenda, the Commission’s work throughout its history to promote fair, efficient and competitive markets continues with energy, thoroughness and the SEC’s characteristic focus on its mission. As I have said before, our work to optimize the equity markets is never finished. In order for our markets to remain the strongest and most reliable in the world, regulatory changes must be timely, effective, and informed – and a constant priority. Our current significant efforts are the latest in the Commission’s historical ongoing work to address the evolving market structure challenges. And we will continue to work hard and smartly to adapt and grow with the marketplace to better protect investors and to optimize the markets for the issuers who rely upon them. It is obviously one of the agency’s most important responsibilities.
Thank you for listening.
[1] See Theodore Roosevelt, Citizen In A Republic, Remarks at the Sorbonne (Apr. 23, 1910), available at http://www.theodore-roosevelt.com/trsorbonnespeech.html.
[2] See Press Release 2016-81, SEC Adopts Amendments to Implement JOBS Act and FAST Act Changes for Exchange Act Registration Requirements (May 23, 2016), available at https://www.sec.gov/news/pressrelease/2016-81.html.
[3] See Mary Jo White, Chair, U.S. Securities and Exchange Commission, The Future of Investment Company Regulation, (May 20, 2016), available at: https://www.sec.gov/news/speech/white-speech-keynote-address-ici-052016.html and Mary Jo White, Chair, U.S. Securities and Exchange Commission, Beyond Disclosure at the SEC in 2016, (Feb. 19, 2016), available at https://www.sec.gov/news/speech/white-speech-beyond-disclosure-at-the-sec-in-2016-021916.html.
[4] Securities and Exchange Commission, Institutional Investor Study Report, H.R. DOC.NO. 64, 92d Cong., 1st Sess. (1971).
[5] Securities and Exchange Commission, Statement of the Securities and Exchange Commission on the Future Structure of the Securities Markets (Feb. 2, 1972), 37 FR 5286 (Feb. 4, 1972).
[6] Pub. L. No. 94-29, 89 Stat. 97 (1975).
[7] See Securities and Exchange Commission, Report of the Division of Market Regulation, Market 2000 An Examination of Current Equity market Developments (Jan. 1994), available at https://www.sec.gov/divisions/marketreg/market2000.pdf.
[8] See Request for Comment on NYSE's Statement of the Terms of Substance of the Proposed Rule Change, Release No. 34-42450 (Feb. 23, 2000), available at https://www.sec.gov/rules/sro/ny9948n.htm#link1.
[9] See Chair Mary Jo White, U.S. Securities and Exchange Commission, Enhancing Our Equity Market Structure, Remarks at the Sandler O’Neill & Partners, L.P. Global Exchange and Brokerage Conference (Jun. 5, 2014), available at https://www.sec.gov/News/Speech/Detail/Speech/1370542004312.
[10] See Chair Mary Jo White, U.S. Securities and Exchange Commission, Focusing on Fundamentals: The Path to Address Equity Market Structure, Remarks at the Security Traders Association 80th Annual Market Structure Conference (Oct. 2, 2013), available at https://www.sec.gov/News/Speech/Detail/Speech/1370539857459.
[11] See Chair White Oct. 2013 Speech, supra note 9.
[12] See Chair White Oct. 2013 Speech, supra note 9.and Regulation of NMS Stock Alternative Trading Systems, Release No. 34-76474 (Nov. 18, 2015), available at https://www.sec.gov/rules/proposed/2015/34-76474.pdf.
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HKEX: Securities And Futures Commission Issues Restriction Notice To A Broker To Stop A Client From Withdrawing Shares And Transferring Money Connected With Suspected Insider Dealing
The Securities and Futures Commission (SFC) has issued a Restriction Notice to Kingsway Financial Services Group Limited (KFS) prohibiting it from processing cash and shares held in a client account that holds proceeds of suspected insider dealing (Notes 1 & 2).
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SGX Reports Market Statistics For May 2016
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Tokyo Stock Exchange: Approval Of Initial Listing (TOKYO PRO-BOND Market): List JPY-Denominated Foreign Bond On TOKYO PRO-BOND Market With Value Of JPY 8 Billion (Banco Latinoamericano De Comercio Exterior, S.A.)
Today, Tokyo Stock Exchange approved a JPY-denominated bond with a total value of JPY 8 billion (tenor: 3 years, coupon: 0.46%) from Banco Latinoamericano de Comercio Exterior, S.A. for listing on the professional-oriented TOKYO PRO-BOND Market.
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UKâs Financial Conduct Authority Response To The CMAâs Provisional Decision On Remedies From Its Retail Banking Market Investigation
We welcome the Competition and Markets Authority’s (CMA’s) efforts to increase competition in retail banking and are supportive of its provisional decision to make recommendations to the FCA to take forward a range of remedies, namely on service quality information, prompts and overdraft measures. The treatment of existing customers is a key priority for the FCA, including within our work on competition in retail banking.
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Intercontinental Exchange Reports ICE & NYSE May 2016 Statistics
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported May 2016 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
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Weekly Top 5 Papers â June 3, 2016
1. A Quantitative Approach to Tactical Asset Allocation by Mebane T. Faber (Cambria Investment Management)
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Chinese Governmentâs CFETS Chooses ICAPâs EBS BrokerTec For Next Generation FX And Fixed Income Trading Platform
ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that China Foreign Exchange Trade System (CFETS), China’s official inter-bank market trading platform and infrastructure provider, has chosen ICAP to deliver the underlying technology for fixed income and foreign exchange (FX) electronic execution services in mainland China. The technology will be delivered by EBS BrokerTec, ICAP's market-leading electronic FX and fixed income business, which will form part of NEX Group plc, following the completion of the transaction with Tullett Prebon to dispose of ICAP’s global hybrid broking and associated information businesses.
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Dropbox CEO Offers Great Advice for College Graduates
In this week's New York Times Corner Office column, Adam Bryant interviews Drew Houston, the CEO of Dropbox. Houston has some terrific advice for college graduates. I would argue that it's great advice for all of us, of any profession or stage of life.
I did the commencement speech for M.I.T. in 2013. I said that if I had a cheat sheet that I could give myself at 22, it would have three things on it: a tennis ball, a circle and the number 30,000.
The tennis ball is about finding the thing youâre obsessed with. The most successful people and successful entrepreneurs I know are all obsessed with solving a problem that really matters to them. I use the tennis ball for that idea because of my dog, who gets this crazy, obsessed look on her face when you throw the ball for her.
The circle is really about the idea that youâre the average of your five closest friends, so make sure to put yourself in an environment that pulls the best out of you. And the last is the number 30,000. When
I did the commencement speech for M.I.T. in 2013. I said that if I had a cheat sheet that I could give myself at 22, it would have three things on it: a tennis ball, a circle and the number 30,000.
The tennis ball is about finding the thing youâre obsessed with. The most successful people and successful entrepreneurs I know are all obsessed with solving a problem that really matters to them. I use the tennis ball for that idea because of my dog, who gets this crazy, obsessed look on her face when you throw the ball for her.
The circle is really about the idea that youâre the average of your five closest friends, so make sure to put yourself in an environment that pulls the best out of you. And the last is the number 30,000. When
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Intercontinental Exchange Chairman And CEO To Present At Sandler OâNeill Global Exchange And Brokerage Conference On June 9
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Jeffrey C. Sprecher, Chairman and CEO, will speak at the Sandler O’Neill Global Exchange and Brokerage Conference. The fireside chat will take place on Thursday, June 9 at 11:30 a.m. ET. The presentation will be broadcast live over the Internet and can be accessed in the investor relations and media section of ICE’s website at www.theice.com.
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Investor Activity On GPW Markets In May 2016
The value of trade in equities on the Electronic Order Book on the Main Market was PLN 12.5 billion in May 2016, representing a decrease of 27.4% year on year. The number of transactions was 1.4 million in May 2016, an increase of 13.0% year on year. The average daily value of trade in equities on the Electronic Order Book was PLN 624.6 million on the Main Market and PLN 4.4 million on NewConnect in May 2016. The WIG index reached 45,844.15 points at the end of May 2016, a decrease of 17.4% year on year.
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CME Clearing Named "Clearing House Of The Year" By GlobalCapital
CME Group, the world's leading and most diverse derivatives marketplace, today announced that the company has been named 'Clearing House of the Year' by GlobalCapital in their Americas Derivatives Awards 2016.
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Moscow Exchange: Eurobonds Tickers To Be Changed
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Stephen L. Cohen, Associate Director Of Enforcement, To Leave SEC After Nearly 12 Years Of Service
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Nigerian Stock Exchange Receives Award for Promoting Financial Literacy
The Nigerian Stock Exchange on Friday, May 27, 2016, received the “Corporate Achievement Award to a Financial Institution” at the inaugural annual Financial Literacy Excellence (FILEX) Awards. The Award which is aimed at celebrating and recognizing leadership and innovations that promote financial literacy in Nigeria was presented to the Exchange for its annual essay competition and investment education programmes in the capital market.
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