SGX should take a leaf out of new NYSE CEO book

November 14, 2013 at 3:38 pm Leave a comment

From Wall Street Journal:”The New York Stock Exchange’s new boss, Jeffrey Sprecher , said he plans to reorient the exchange back toward individuals and away from the high-frequency traders who play an increasingly large role in the financial markets.“Everything we do on the NYSE should be focused on: Are we making it a better environment for individual investors and people who manage individual investors’ retirement accounts?”

Sprecher took aim at the practice of paying rebates to active traders, which he and others say provides incentives for those companies to buy and sell securities without much concern for the value of stocks. It now is commonplace, however, and many exchanges see it as a fundamental part of their effort to attract business.
“I don’t like the idea that you pay people to trade; I don’t think that it should be done,” Mr Sprecher said. “I don’t think it should be legal. It puts wrong incentives in the market. People should come and want to own great companies because they want to go for the economic ride of that company.”

Well-said. SGX,time to listen and follow.

Entry filed under: Investing. Tags: .

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