4. Cboe names new chief executive as Edward Tilly resigns over undisclosed personal relationships
Coming in at number four in The TRADE’s most read stories for 2023 was news in September that Cboe Global Markets’ chief executive officer Edward Tilly had resigned over undisclosed personal relationships.
Tilly resigned from the company following the conclusion of an investigation into his conduct, launched in late August 2023. The investigation, which was led by the board of directors and an independent counsel, concluded that Tilly did not disclose personal relationships with colleagues, violating the company’s standards and values.
“Cboe strives to uphold the highest ethical standards across the organisation, and fully investigates and takes appropriate action when it determines that any of its policies have been violated,” said William Farrow III – newly appointed non-executive chair of the board of directors.
Appointed to replace him was a member of its board of directors, Fredric J Tomczyk, who assumed the role with immediate effect. Tomcyzyk assumed the role of chief executive officer after four years on Cboe’s board. Previously in his career, he served as president and chief executive of TD Ameritrade Holding Corporation for eight years and as vice chairman of TD Bank Financial Group. Prior to joining TD, he was president and chief executive of London Life and London Insurance Group.
3. SEC issues ruling for a new National Market System
Many of our most read stories over the last 12 months have unsurprisingly had a regulatory focus, given the number of changes taking place across the globe. While much of industry regulatory discussion over the past few years has been centred around the Mifid overhaul in Europe, with certain aspects such as transparency playing the role of poster child for post-Brexit divergence, our readers in 2023 have been more interested in what is happening in the US.
Coming in at number three in our most read stories was news in September that the US’ Securities and Exchange Commission (SEC) had issued a ruling for a new National Market System. Central to the announcement was a filing of a new national market system plan (NMS plan) by the watchdog, specifically directing FINRA and 18 SROs associated with Cboe, Nasdaq, and NYSE to act jointly in developing the NMS plan.
Incumbent exchange groups in the US, which include the aforementioned venues, have historically held total control and voting rights related to the production and dissemination of data. This has led to an ongoing debate by market participants, with many arguing that venues hold an unfair monopoly on the critical market data and creates a conflict of interest.
The SEC subsequently ordered exchanges to submit new plans for governance of market data in May 2020, in a bid to overhaul control over the equity consolidated tape and address conflicts of interest concerns. September’s announcement marked the filing of a new NMS plan “to replace the three existing national market system plans which govern the public dissemination of real-time, consolidated equity market data for national market system stocks”.
The results are set to be published for public comment next year, and according to the SEC, the revised plan must: include a date by which it will become fully effective, alongside a prescribed timeline and periodic progress reports; require that all those involved be subject to the plan’s conflicts-of-interest and confidentiality policies; include specialised provisions regarding the sharing of protected information; and outline rules regarding the use of subcommittees.
2. Perpetual merges regional asset management businesses under one global umbrella
At number two in our most read stories series, we have the announcement that Perpetual Group had merged its regional assets management businesses to form one global division in August. Among the asset management bands that were merged were Perpetual, Pendal, Barrow Hanley, J O Hambro, Regnan, Trillium and TSW. The Group said the move will help it to reap the benefits of a “global multi-boutique model” as well as a global distribution team in asset management.
Rob Adams took on the dual role of chief executive of Perpetual Group and chief executive, asset management. Two further roles were created to support Adams within the asset management leadership team.
“The changes we are making enable us to have an improved focus on our global asset management business and successful execution of strategy, while creating a simplified Perpetual Group leadership structure focused on driving future growth across all our businesses,” said Adams.
Graham Kitchen, who had served as chairman of Trillium and Perpetual corporate entities in the UK, will serve as global head of investment strategy while a search for a permanent candidate commences. Elsewhere, Clare Forster was appointed as global head of business management and strategic delivery. Regional chief executive roles for Europe and UK (EUKA), and the Americas were also impacted by the development. Alexandra Altinger, chief executive of asset management, EUKA (including J O Hambro) subsequently left at the end of August.
1. Majority of prop trading firms obliged to join FINRA under expanded SEC rule
And finally, we reach the crescendo of The TRADE’s most read stories for 2023. Coming in at number one with over 70,000 views was news in August that the US Securities and Exchange Commission (SEC) had moved to expand the remit of national securities associations such as the Financial Industry Regulatory Authority (FINRA) to cover previously exempt proprietary trading firms.
Once again with a regulatory focus at its epicentre, the story unpacked the move by the watchdog and what it would mean for certain types of participants. As the industry’s product universe grows but headcount shrinks, more and more firms are relying on publications such as The TRADE and market structure specialists to explain key regulatory developments.
The SEC’s August decision to increase the number of broker dealer firms registering with FINRA came as the Commission aims to promote fair, orderly, and more efficient markets. The SEC under Gary Gensler has been overhauling many market areas throughout the course of this year, some of which haven’t seen an update to their regulations in decades.
“Today [23 August], many broker-dealers conduct significant cross-exchange or off-exchange activity,” said Gensler in an August statement. “Yet, some of today’s broker-dealers continue to rely on an exemption from national securities association registration that’s older than the cell phone era. This has led to a regulatory gap whereby a number of firms that have cross-market, monthly trading volume valued in the hundreds of billions of dollars are exempt from national securities association oversight.”
The decision is set to contribute to greater transparency – in particular for off exchange activity – and strengthened oversight in the treasury markets due in large part to the fact that FINRA requires members report post-trade activity in markets.