Financial Markets Quality Conference 2019: Welcome and Fireside Chat with Robert W. Cook

Financial Markets Quality Conference 2019: Welcome and Fireside Chat with Robert W. Cook


welcome to Georgetown University and the
McDonough School of Business I’m Reena Aggarwal and the Robert
McDonough professor of Finance and director of the Georgetown Center for
financial markets and policy I’m also the vice provost for faculty at
Georgetown University as most of you know Georgetown is one of the world’s
leading academic and research institutions offering a transformational
educational experience that prepares the next generation of global citizens to
lead and make a difference in the world housed at the McDonough School of
Business the Center for financial markets and policy we provide thought
leadership for global finance at the McDonough School we really believe in
excellence in research to impact practice and policy
it starts with excellence in research that’s a prerequisite but we don’t want
it to stop there it must impact our work must impact practice policy the global
community through our activities the center contributes to an informed
solutions oriented approach on issues that are critical for global financial
markets we really do believe it’s the responsibility of Georgetown University
to provide unbiased analysis that can guide market participants and
policymakers for example we do these congressional policy briefing series on
Capitol Hill and what they tell us is we get a lot of information but when you
Georgetown come in we know it’s unbiased we know you’re presenting both sides and
the other thing that happens is because we are an academic institution they
don’t feel intimidated asking us questions okay sometimes with industry
they’ll feel intimidated asking questions so with us they don’t feel
that way we are professors and we bring in different
perspectives to the table so the center is celebrating its 10th year we go back
to 2009 the same year that we actually moved into this building the home of the
McDonough School of Business the students in the room might not fully
comprehend what happened in 2008 2009 but others in the audience can and
probably have vivid memories I certainly remember September 15 2008 I was in New
York standing in front across from the Lehman building when Lehman declared
bankruptcy that is the time when it really it was kind of heartbreaking to
see employees of Lehman coming out with their boxes and their belongings as
Lehman declared bankruptcy and everything else that was going on at
that time there was so much uncertainty there were
important regulatory changes that were being proposed and unfortunately
financial sector executives they had lost credibility right and they didn’t
want to speak up and at the same time policy makers were very focused on how
do we take care of this crisis there was a real leadership void in the world of
finance this is how the center for financial markets and policy emerged to
fill this leadership void at a critical time and as you might remember
Washington DC I would say unfortunately became this new global financial hub
everyone was trying to come to Washington because Washington was going
to influence global finance even more the center’s first event was actually
right here in this auditorium and it was in partner with Financial Times and I
remember very clearly it was for the inauguration of this Hariri building
the title of that event was the future of global finance it was issues about
who is going to be the next leader in global finance if you remember at that
time a lot of conversation about the BRIC countries and a lot of conversation
about regulation we had just had that huge financial crisis and what new
regulation was needed so we started our conversations with issues like too big
to fail who is going to be a Sify who is going to be a global Sify and what
will it mean to be a Sify all about systemic risk all about dodd-frank for
the next couple of years what are the implications of dodd-frank going to be
we’ve always addressed issues about capital markets structure as we’re going
to do today we’ve always talked about capital formation and jobs that’s so
important for the global economy we’ve been very interested in shareholder
activism and proxy voting issues and then there’s been passive active ETFs
volatility and so on a whole lot of market structure issues heated debates
between senior executives of exchanges on different issues they agreed on some
they didn’t agree on some made their way to the Wall Street Journal and other
places big debates we’ve had about the SEC’s limit up limit down rules huge
conversations about high frequency trading and and very nicely it was
guided by some of the research and scholarship coming out of the McDonough
School we’ve also transformed ourselves as
global finance has changed in addition to market structure our focus has been
moving towards FinTech for example we are very interested in ESG issues
that has become extremely important for institutional investors global finance
issuing companies so we’ve been moving as the world changes we also transform
the center and the issues that we’re taking up at the center just to give you
an example as many of you know we hold the DC blockchain summit here in March
and again this room tends to be packed for that we’ve conducted studies for
example with the World Economic Forum on the complex regulatory framework of
global FinTech right now we have visitors from the Japan FSA and their
fellows at the center and they’re here because we are in Georgetown and we are
here in Washington and they’re working on regulatory issues thinking about
Japan on FinTech and blockchain we just signed an agreement with the
Department of Commerce their ITA that’s the international trade wing and
we have a partnership with them we did a closed breakfast meeting with
public/private partnership on competitiveness of US markets
specifically in the blockchain area especially from a regulatory point of
view how do we get our act together from a regulatory policy point of view and
this was closed-door this was not open to the media and we had a lot of people
from the hill and Treasury and and the private sector attending this roundtable
discussion so but so we’re doing a lot of things here that are very exciting
most importantly we couldn’t do it without your support so I’m most
grateful to you for the support we’ve had strong partnerships with so many a
few the FTSE Russell Group FINRA is so delighted to have Robert Cook here
once again New York Stock Exchange NASDAQ Blackrock I could go on and on I
do want to thank our sponsors and participants which includes Blackrock
Alerian Emergent Technologies FINRA FTSE Russell GlobalX KPMG Ripple
MSCI New York Stock Exchange NASDAQ Morningstar Gemini Precidian GTS OCC
Vanguard World Federation of Exchanges IndexIQ Invesco SEC CFTC I could go on
and on but I really do appreciate all of the support and as my colleague John
Jacobs would say there are only two groups in the room today those who
support the center and those who will soon support the center if you already
aren’t you’ll soon support the center we are absolutely thrilled to have John as
a part of our team here I also want to thank our finance faculty my colleagues
who who helped out in many different ways here and the person who’s
responsible for pulling all of this together is right at the back there Anna
Kormis Anna is the assistant director of the center please in a minute let’s
thank Anna and i want to thank our marketing and communication staff which
includes Molly and Lauren and Ashleigh Chris and Teresa the whole team we
really worked together as a team faculty staff the dean’s office and so Anna
thank you for all that you’ve done we have a great set of speakers I hope
you’ll find the discussion today informative and and this will lead to a
solutions oriented approach as we move forward now it’s my distinct pleasure to
introduce Paul Almeida the Dean of the McDonough School of Business
Dean Almeida when I think of Georgetown I think of and the McDonough School of
Business I think of a place where it’s natural for professionals policy makers
academics alumni students faculty to get together and talk in serious ways and
knowledgeable ways about big issues facing the world and not just big issues
and big challenges but the solutions to these issues and these challenges and so
I’m really grateful to all of you for traveling from near and far I just met
someone who flew in from China so if you think you woke up in Virginia and
Maryland and deserve thank you think again but seriously to attend thank you
for attending the financial markets equality conference I know you’ll enjoy
listening to our speakers interacting with one another learning with one
another we have an outstanding faculty participating today including Rohan
Williamson Turan Bali Jim Angel Alberto Rossi I saw you somewhere and
Sandeep Dahiya in addition to of course Professor Reena Aggarwal
now I think most of you know that Georgetown’s an old institution over 225
years old and yet we take pride in being always at the cutting edge of innovation
in education and always focusing on why we exist
to serve the common good now we are often rated as one of the leading
business programs in the world including last year’s survey of recruiters by
Bloomberg Businessweek which which ranked our graduates as the best trained
graduates in the world now I you know rankings you should take with a pinch of
salt usually especially if you don’t like them but I interact on a daily
basis with our alumni our students our faculty our staff and I can tell you we
have a hundred reasons to be proud but we are incomplete without you
we exist because we interact with the world and we’re going to make a
difference to the world we exist because the world faces huge challenges and we
by working with you by discussing complex issues we can make the world a
better place so that’s why I’m particularly proud about you know being
the Dean over here now a key to the success of the center which is ten years
old has been its ability to leverage the district distinct qualities of
Georgetown McDonough and to create opportunities that few other schools can
match the center collaborates first with other schools areas of expertise across
Georgetown brings together scholars across campus to tackle issues including
those on financial markets and policy the Center leverages our location in
this wonderful global capital city by sharing expertise within the community
at events like this conference by testifying on Capitol Hill by
collaborating on research projects where faculty and students tackle real world
issues from organizations like the World Bank and the World Economic Forum
additionally the center draws from our global alumni network and
professional networks of our faculty to create partnerships with leading
organizations like the US Department of Commerce and the digital Chamber of
Commerce and several institutions in the private sector they also build their
content in the classroom and in the business community within the Jesuit
tradition of academic excellence ethical leadership and care for the common good
something that is deeply needed in a rapidly changing and sometimes confusing
world I would like to again thank Professor Reena Aggarwal and her finance
colleagues thank John Jacobs and the entire center team for all you’ve done
to accomplish such success we know you concentrate on excellence and I know
this community here and Beyond will continue to be a part of your Center for
many years to come so I hope you all have a wonderful day I hope you’ll get a
little closer to Georgetown and Georgetown McDonough and we’d love to
have you back again and again thank you so much so we’ll start off with our first
fireside chat and professor Rohan William will lead it off good morning
I’m Rohan Williamson I’m a professor of Finance and Sullivan beam professor of
International Business at Georgetown my areas of focus are corporate governance
and risk management and also International Finance I’ve been here for
22 years which I was reminded of earlier by Mr Cook here and I will also want it
to congratulate the the center for now we just call it the center when
you’ve been around for 10 years and it’s such a great work now we just say the
the fmq which we know exactly what that means now that means a point of success
but this is our first fireside chat with Robert cook if you’re gonna do a
conference like this this is one of the most important and knowledgeable people
to have a conference here so Robert cook he’s the president CEO of FINRA and
chairman of the FINRA investor Education Foundation a couple of stints and in
regulation as a private attorney and again a few years at at the SEC as a
director of the division of trading and markets so this is someone that’s quite
knowledgeable graduate of not Georgetown but of Harvard University so that’s okay
and so we’ll spend a few minutes I’ll cover a few things here we kind of start
with a little bit of the technology side and which technology has been used for
then move on to other issues so let’s talk about first Robert that the
surveillance surveillance and our surveillance changing and what role is
technology playing in market surveillance well first thanks Rohan for
doing this with me and Reena and team thanks for including me again in this
terrific conference were really delighted to be part of it and
congratulations on having such a robust agenda surveillance and how does
technology affect surveillance I mean this is something we spend a lot of
I’m thinking about it FINRA it’s had an enormous impact on our programs so as
you may know part of FINRA’s role is a frontline regulator of the securities
trading firms is that we have to monitor their trading activities and looking
for things like compliance with rules customer tection rules market market
integrity rules trade reporting rules etc and that means that we’re looking at
forty eight thousand products we’re looking at fifteen hundred broker
dealers there’s a lot more in definitive membership but we’re talking about
number of broker dealers who are trading securities actively 60 ATS’ 19
exchanges so as you might imagine a lot of data is entailed in pulling together
this information about all these different products executed on all these
different venues and in fact we couldn’t do this to what we pull in that data we
discovered if we didn’t migrate to the cloud so about five years ago we began a
journey of migrating our infrastructure into the technology architecture into
the cloud and we started with our market oversight area because that is our the
area of the biggest amount of structured data and we’ve since been migrating all
of the rest of our applications into the cloud as well because of the
efficiencies and enhanced security we would think it provides us so it’s sort
of a question of how could you do it if you didn’t have the computing power that
the cloud offers the the the you know if we had our own you know private database
or you know servers and everything else we couldn’t scale to that size we
routinely have been bringing in say last year upwards of a hundred billion
messages a day we have many petabytes of information and that’s before we became
the processor for the consolidated audit trail and it’s only gonna get larger so
the the cloud migrations really enabled us to be able to handle data at that
scale but it’s also helped us develop and roll out better surveillance
techniques and tools including artificial intelligence and
machine learning which we are now implementing we have about 300 different
algorithms we run on this data all the time looking for 400 different types of
threat scenarios by pulling all this data together we’re able to see things
that we hadn’t been able to see before in terms of you know what whether
there’s trading activity that might be happening in one venue that’s connected
to activity that’s happening at another venue so it really made a it’s been
transformational for us in terms of just being able to keep up we have a lot of
work still to do and we’re investing a lot as we move forward into further
developing our machine learning in particular and artificial intelligence
capabilities okay and is that fully enforced or we’re still trying to get to
doing everything on the cloud and with AI so we’re all fully in the cloud and
we have a number of patterns we call them which are surveillance tools that
are in production that our machine reflect machine learning and we’re that
sort of an area we need to you can’t have analysts looking at spreadsheets
when the spreadsheets would be trillions of rows right and we have that capacity
to pull that kind of structured data together now but we need think tools
that help identify outliers and one of the areas that we’ve been finding most
helpful are visualization tools now we have people some are this audience who
are spend their time at FINRA working on this and I’m not going to pretend to be
the expert on on what they’re doing but I can tell you I go to Rockville where
you know I mean like campuses for for this work and I look over their shoulder
as they’re looking at it as an analyst is looking at a screen and the
visualization tools allow you to see patterns that they then would dig in on
and I I don’t know exactly what those patterns are but I can see from the tool
that okay there’s a cluster of unusual activity over here that suggests there’s
something you know something going on that needs further so those sorts of
techniques to help our analysts discover what’s going on more quickly or vital we
have a lot of course as other this is going to be a continued area of
investment for us both in terms of our people and in terms of our technology
okay now another hot technology or couple of technology
issues are FinTeching and reg tech and how are those in those
applicants applications in both both applications operating within FINRA and
the use of both yeah so we kind of approach this from wearing two hats one
is as a user the second is as a supervisor of the of these activities in
the industry we regulate so as a user and those two those two hats are you
know really complement each other we learn a lot about what’s going on new
techniques through our oversight of the industry we also learn about things to
watch out for through and from our own use of this technology so we see
enormous opportunity and in reg tech and and FinTech both for on the FinTech side
you know basically we’re our approach our philosophy is that there’s lots of
opportunity that’s presented by fin tech to enhance the customer experience to
potentially offer new products or services that might not otherwise have
been available to do this at lower cost for firms to have operational
improvements maybe better risk management and so forth but you know we
want to look at it through the prism of you know are we making sure that while
these potentially create opportunities for investors and for firms are we
watching out for for investors and making sure that they’re being protected
and trying to strike the right balance between accommodating innovation but
also keeping alright you know closely on are there risks that are being posed for
investors so in terms of our external engagement we have a lot of we have a
variety of whole infrastructure of committees and alike to trying to engage
with the industry to make sure we’re so keeping up on this we have a emerging
regulatory issues group which studies these areas and then puts out papers
which people can then comment on we’ve done one on on the blockchain we’ve done
one on on reg tech in its fin tech and another soup tech seems like you just
add tech to anything nowadays that’s of great interest but so that’s part of it
but on our on I mentioned our own internal use so I talked earlier about
our work using structured data large data
for all the trading that happens across the markets particularly the equity
markets we also have a lot of work that is involves much less structured data or
unstructured data in our basic day-to-day oversight of the sales
activities of broker dealers and brokers and what we’re exploring there is how
can we develop our analytical tools to assist our regulatory staff to identify
patterns to look for problems to be able to work through large amounts of
material more quickly and so what we set up a about a year ago a little less than
a year ago and it’s really beginning to ramp up now is an R&D function for
analytics and the idea is you know you have to invest in this stuff to make it
successful and you got to be willing to make some mistakes and take some risks
if you’re gonna drill for oil wells you drill a lot quickly and then some will
pay off and some won’t but we’re trying to do is identify areas that you’re
gonna go and invest in so we have this whole pipeline of ideas that come into
this R&D function those ideas come from just any of our staff they come from a
create a thon we have every year that brings together the business and
technology teams and once an idea gets qualified as yeah that’s worth spending
some time and money on we it goes into a three-month process where we try to
develop a proof-of-concept and see whether this is worth pursuing and and
then if it is then we would it would then go into development and production
but what we’ve seen is this has enhanced the level of engagement between the
business and the technology side to the shop and it’s also brought forward these
some really amazing ideas I was just at a presentation yesterday and in our Rockville
office we went through kind of the latest ideas are in a pipeline
everything from how can we redact information that comes in that might
have sensitive elements to it like social security numbers and you know we
do normal you know as any regulator we collect maybe records from a broker so
there might be some sensitive information how do you redact it it’s a
ways you could use machine learning or natural language processing to be able
to do that more quickly and effectively or how does you know
if you follow look over the shoulder of an examiner or a regulatory analyst in
their day to day work and there they pull an information from Google and they
pull in information from you know the firm’s website and they pull in this
information what if we’ve tracked that and follow it and then automate that and
see how we could you know be able to have all that happen and then produce
the information for the ANA so there’s some really exciting ideas coming out of
this analytics program okay fantastic now one another hot area I’m sure
everyone is interested is is blockchain and what’s FINRA’s role in sort of
creating a comprehensive coordinated blockchain regulatory regime yeah it’s
interesting question the way it’s phrased you know you know role in
creating a coordinated regime because my sense talking to a lot of people who are
in in this area is it that’s what they’d like right now can we just get all the
regulators together and figure it out and give us a pathway and we’ll do it
right just tell us what to do and I think one of the challenges that every
regulator has its own jurisdiction and so we think our role in part is to try
to work very collaboratively with fellow regulators to make sure that we are
sharing information and developed a coordinated approach I mentioned earlier
that we’ve also invested in kind of trying to learn up on these issues
including putting out papers on them for that purpose but I also think we have
time certain humility because we don’t regulate everything we have us we have
an important role as a regulator but we’re not the federal regulator for one
right and I think this calls for more sort of the approaches would be better
if it’s led by the federal regulators because then it’s going to be more of a
unified system and in addition we don’t they’re they’re aspects of blockchain
type products that wouldn’t have even ever fall within FINRA’s jurisdiction
that said there are some that do and so one of the sort of narrower areas but
important areas where FINRA has frontline regulatory authority is
authorizing firms who have a blockchain based model that involves
thing to do with securities sales or trading or say offering new icos or
tokens or products like that and so we have been working together with the SEC
to sort of begin to understand and and and think about what is the appropriate
regulatory framework for those sorts of models we issued some guidance together
with the SEC about about the roles of broker dealers can play there and where
there are some issues that still need further work a lot of the issues that
are in that guidance and that still need to be resolved or frankly not that’s are
not FINRA issues their SEC issues so we’re kind of trying to work with the
SEC as the industry works with them to figure out are there paths forward for
things like business models that involve more challenging aspects of the use of
distributed ledger technology like clearing or record-keeping or custody of
assets but that said following that issuance of guiding us we there was a
path forward for firms who just want to act as sort of intermediaries or brokers
between others who are trading and so we have authorized a number of broker
dealer firms to either become FINRA members or to change their business
model to and in either case where they would be acting as intermediaries in the
you know ICO space in particular so kind of switching gears a little bit here
within its investor education one of the the broader societal concerns if you
will is the fact that most Americans most investors are there they don’t
understand investing per se and so we are in needed some level of investor
education and this broader issue of financial literacy so is there something
that FINRA is doing in this area to deal with this issue well yes
so FINRA has an investor education program office that works in a space and
there’s the FINRA foundation which is dedicated to investor education and we
do a lot of research we support various projects we have tour materials that go
on tours the libraries so we engage with a lot of investor a lot of other players in the investor education community to
collaborate with them so there’s a lot going on but I think to your point you
know part of what we’ve been doing is supporting research and we have a
national financial capability study that we’ve been doing for several iterations
now and then some other research and it absolutely highlights the concern you’re
raising you know there’s so many more investment products and and many of them
are very complex so investors have to navigate their way through all that and
on top of that we have you know obviously people are more responsible
for their own retirement now than ever before and that that aggravates the
challenge because they don’t have defined benefit plans to be able to rely
on and so it’s important that we understand what’s happening here and at
least our research shows that that we do have a lot of work collectively to do on
this front if you look at the national financial capability study it suggested
that while there have been some areas of improvement over the last few years
there’s there’s some gaps that can that are persistent
so not everyone has improved in the same way you know whites compared to
african-americans the progress has been has been just disparate men have an
easier time making ends meet than women college-educated it’s easier than non
college educated and so some of those gaps we see in our trend analysis
widening and in terms of financial literacy we also see the same concern in
some ways a decline of you know financial literacy as measured by the
ability to answer some some basic questions since the Great Recession that
Reena was talking about and so that’s a that’s a challenge for all of us and one
of the things we we also see in the data is that not many people report ever
having had access to financial education or investment education and of those who
do not many take-up take them take it up and so you know ways that we could
provide more of that with is something I think we should all be thinking about
to investors through the workplace or another
in other contexts okay fantastic now we’re gonna take a couple of minutes
here for Q&A from the audience and I will ask as you approach with your
questions if the the mics that are posted in the house that you introduce
yourself just give us your name and pose your question do we have any questions
yes sir good morning my name is Rajeev
Bhattacarya I’m a professor at Hopkins a quick question for you how much do you
like to ensure that markets are actually efficient and what methods do you take
to measure them and and what these enforcement and regulatory regimes you
have in place for that thank you sure so first of all just a caveat that FINRA
is but one regulator in this overall ecosystem of regulation under the
umbrella of the SEC of course whose mandate does include efficiency of the
markets but also the securities exchanges who play a vital role in both
not just operating exchanges but in regulating and overseeing the markets
that that they operate and the trading on those markets and so you know our
focus is to work in tandem with them and part of the standard that we think we
need to meet when we’re sort of looking at a rule or thinking about a policy
initiative is you know what’s best for investors but ultimately you know part
of that is fair and efficient markets that operate with integrity markets that
investors have the confidence to participate in and so as I think you
know as the question suggests there’s a lot of competing aspects when you’re
doing policy about you know how much weight do you put on the different
variables but the overall efficiency of the markets liquidity information access
to information transparency these are pretty fundamental to a lot of the
programs that that FINRA operates and certainly the the ultimate efficiency of
the markets is is one of the key drivers or decision-making I don’t that’s
responsible Kelvin To at Date Boiler and this question is
related to the FINRA CAT projects and it has been long identified by the
International Organization and Security Commission saying that okay how do we
review across all the books especially when the time stamp is only like 50
milliseconds plus or minus that could literally be thousands of trace happens
during that process or minus 50 milliseconds how’s FINRA is preparing
to rebuild those across all the book well you mentioned the consolidate order
trail project which sooner is the process therefore but it really is the
project that’s being built by the exchanges in FINRA and it’s really
mandated by the SEC so ultimately the FCC’s rule provides guidance on a
variety of aspects of the implementation of the consolidated audit trail
including time stamping and there’s a lot of thought that’s sort of gone into
establishing some basic requirements to provide more uniformity of and
consistency of time stamps you know given you know things the council moving
faster and faster at what point does a time stamp become too wide a period of
time to be able to capture trading within it but I think that consolidated audit
trail is going to be a significant advance forward in terms of that
particular issue and they’ll be continued to be looking at things like
time drift and other aspects that could affect the validity of the data or the
analysis of it thank you thank you John Davidson options Clearing
Corporation so FINRA is a u.s. self-regulatory
organization you’ve talked about the mandate the markets are global and there
a fair number of US investors who participate outside the US
what’s FINRA’s role in that regard and how do you cooperate with similar
organizations in other countries well thanks John John and I have known
each other for decades working on various projects going back to the
rollout of portfolio margining but as as John alluding to you know we’re us SRO
so when we talk about collaborating and coordinating with other regulators
there’s a little bit of a challenge because we’re kind of an odd duck you
know not every other country has SROs at all or SROs like FINRA that is a not
operating a market and it’s a not-for-profit entity and so there are
some other countries where there’s an analog to FINRA Canada being the closest
example but that said given our focus particularly our focus on market
oversight and on retail investor protection among others we have a lot of
touch points with regulators around the world and so we participate in variety
of ways with them to develop the ties and connections we need to and to make
sure we’re sharing information where appropriate we participate in IOSCO’s working groups on a number of them we’re sort of a have a permanent seat as
a party participant we also have various Business Conduct round tables and other
types of regulator only sessions that we do with regulators from around the world
to talk about hey what are you thinking about and it’s a fascinating
conversation I just attending one a couple weeks ago in New York that we
were hosting with regulators from around the world and discussion really was
about how how can we use FinTech and analytics and other tools to enhance our
work and there was a lot of great ideas that were popping off as one party would
say hey we’re doing this so we could try that so we find that that type of
interaction incredibly valuable any interaction also goes into areas of you
know oversight as well where appropriate including enforcement activities my name
is Jennie Bai associate professor of Finance in Georgetown I like to hear
more information you mentioned the analyst to programmer
we know the equity analyst to provide very useful information for academia and
the industry from their forecaster earnings and its deviation all of this
information so credit analyze to usually have some unique information what do
they care about is this credit this analyze the programming FINRA will try
to do something I just curious what exactly the background about data that’s
my first curiosity second one is recently FINRA start to put the ‘cherry
bomb’ trading put also on their platform which is a similar like the Capri
bounder which a finger are already dead so far I know it’s a highly restrictive
data only to the Federal Reserve Board and some selected people I wonder what
is the motivation for end the goal for FINRA to bring the ‘cherry bomb’
transactions into the platform and to what extent academic people can access
that to do more research related thank you very much
sure so just on the first question about our analysts just to be clear what I’m
talking more about regulatory analysts who are looking at trading data and
trying to look for patterns of manipulation or non-compliance with the
rules as opposed to how that term is often used in the industry like you know
analysts of you know the credit markets or something like that so we’re really
focused for now primarily on how do we look at the data we have structured or
unstructured and figure out ways that we can be quicker and faster and better at
identifying areas of concern or red flags and then being able to follow up
on them the I think the other initiative you’re referring to is we call it trace
for Treasury’s it’s the initiative to reacquire reporting of Treasury bond
trading that was rolled out a couple you years ago the impetus was some trading
activity in the Treasury markets that we’re led to some concerns about what’s
going on and do we have adequate data and I think as the federal regulators
got together to look at that they realized that the answer is no we didn’t
have good data as as a regulatory community to be able to monitor or
examine for it for behavior that might be of concern in the Treasury bond
market so the idea was FINRA was already operating a trade reporting
facility for corporate bonds let’s add Treasury bonds into that and this is
really an initiative obviously very important to the Treasury because of
their role in the Treasury market and we really are working under the SEC and so
in many ways we’re sort of taking guidance from the Treasury and the SEC
and the Fed about where they want to go with this initiative right now it’s just
pulling data in and being used for regulatory purposes we are not currently
disseminating that data out to the industry or to or to academics I
think the expectation is at some point in the future there may be more
transparency around this data but they’re really important questions about
how with that transparency occur and and and what what has to happen before it’s
appropriate to be transparent right now we’re only collecting data for example
from securities firms not from commercial banks who because they’re not
our members we can’t collect from them so there’s a question about whether it’s
appropriate for example to provide one category market participants trading
information but not another’s so there’s a lot of questions about that and I
think the Treasury is spending all the time thinking about that and will be
will be taking their the guidance from them and the SEC about you know where
they want to go with this initiative okay Robert thank you very much
that was a fantastic fireside chat even though we don’t have the fire I wanted
to thank you from the from on the behalf of Reena and the Center for coming here
and a fantastic opening discussion and we hope to see you back here very
soon thank you thank you for your questions
appreciate it

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