Washington’s Focus on Financial Regulation Will Have Far Reaching Impact on U.S. Equities Market, finds TABB Group Research

Exclusive research unpacks ramifications of the Trump administration’s goal of repealing Reg NMS and the Volcker Rule

New York, New York, UNITED STATES

NEW YORK and LONDON, Feb. 22, 2017 (GLOBE NEWSWIRE) -- The current presidential administration has placed a broad array of financial regulations in line for the incinerator, including many in the crosshairs of U.S. equities market participants, such as the Regulation National Market System (Reg NMS), the Volcker Rule under The Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Third Basel Accord (Basel III). TABB Group research, “Trump, Volcker, Reg NMS, and HFT,” looks at the impact of repealing both the Volcker Rule and Reg NMS on the U.S equities market and who wins and who loses in this scenario.

TABB Group founder and research chairman Larry Tabb, who authored the report, explains that equities market infrastructure would for the most part not be impacted by tearing up Dodd-Frank and the Volcker Rule. The impact would instead be felt through the amount of capital that banks can allocate to the equities business. Meanwhile, scaling back Reg NMS would have a very specific application to the U.S. equities markets as its four pillars touch order protection, market access, tick size definition, and rules on how market data fees are collected and rebated to exchanges.

“New markets, tick sizes, matching models, speedbumps and a decoupling of the markets are all potential outcomes pending how these regulations are broken down, forcing traders, technologists and algorithm providers to completely rethink their execution infrastructure,” says Tabb. “In the end, we expect the winners will be electronic market makers, banks taking proprietary risk and buy-side traders that want to trade in blocks or non-high-speed price time markets. On the other hand, retail investors are going to have a harder time trying to determine best pricing, while institutional investors struggle with using algorithms to trade.”

Tabb provides further details in the research regarding what changes will most likely become reality and how the potential for massive market structure change will create new rules that impact both institutional and retail investors. The research also provides specific insight into the impact of eliminating specific portions of Reg NMS and Volcker, investigating the process of repeal and the most logical places to keep or burn down the regulations.

The report is now available for download by TABB equities clients at https://research.tabbgroup.com/search/grid. For more information or to purchase the report, contact info@tabbgroup.com.  

About TABB Group

TABB Group is the international research and consulting firm focused exclusively on capital markets, founded on the interview-based research methodology developed by Larry Tabb. Since 2003, TABB Group has been helping business leaders gain a truer understanding of financial markets issues to develop actionable roadmaps and approaches to future growth. By accurately assessing their customer base, competition, and key market opportunities, TABB Group works with senior industry leaders to make critical decisions about their business. For more information, visit www.tabbgroup.com.


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