SEC Nominee Mary Jo White on Market Structure Reform

Seal of the U.S. Securities and Exchange Commi...

Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)

“Our markets…are continuously evolving, and the technology of today is most certainly not the technology of tomorrow,” SEC nominee Mary Jo White told the Senate Banking Committee in prepared testimony before the panel.

White noted that “High frequency trading, complex trading algorithms, dark pools, and intricate new order types raise many questions and concerns.”

“Do they result in unnecessary volatility, or create an uneven playing field? Or do these modern-day features bring benefits such as efficiency, price reduction, and healthy competition to our markets? Do they do all of these things?,” she asked.

According to White, the existing academic and regulatory studies “have not been consistent or definitive in their observations and findings about whether and to what extent harm is caused by the current market structure and practices.”

As a result, these high-speed markets and new technologies “require constant monitoring and analysis” so that they can “be wisely and optimally regulated without undue cost and without undermining [of their] vitality.”

White vowed to “vigorously embrace…the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”

“There must be a sense of urgency brought to addressing these issues to understand their impact on investors and the quality of our markets so that the appropriate regulatory responses can be made,” she testified.

In addition, White identified two other pressing priorities she plans to tackle if confirmed as SEC Chair.  She pledged to work with other SEC Commissioners and regulatory agencies to complete existing Dodd Frank and JOBS Act provisions “in as timely and smart a way as possible.”

White also promised to continue efforts aimed at leveling the playing field for all market participants.  “Strong enforcement is necessary for investor confidence and is essential to the integrity of our financial markets,” she said.  White plans to strengthen the SEC’s enforcement mechanisms so that it is a “bold” and “fair” presence in today’s marketplace.

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