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News January 18, 2010 Issue

So What’s the Concept Release on Market Structure All About?

According to Dan Gray in the Division of Trading and Markets, the SEC wants to ensure that the market structure reflects an appropriate balance of Congressional objectives. With ten exchanges, five electronic communications networks, and 32 dark pool alternative trading systems, potential fragmentation is a core issue. The division and the agency are interested to learn what are the best metrics for assessing market quality? Have those metrics improved or eroded over recent years? How is the current structure working for both large and small companies? Are high frequency trading stategies harmful or beneficial? Do co-location practices really provide an unfair advantage? Have dark pools reached such a significant level of overall market activity that they detract from price transparency and quality?

New Division director Robert Cook said the staff is open to all perspectives in these issues. Commissioner Troy Paredes observed that the call for data "has a way of disciplining decision-making."

Keep those cards and letters coming. Comments have been requested by April 21.