ICI Member Call to Discuss SEC Roundtable on Thinly-Traded Securities Scheduled for June 18 at 1:00 pm (ET)
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June 8, 2018 TO: Equity Markets Advisory CommitteeETF (Exchange-Traded Funds) Committee
ETF Advisory Committee
ICI Global Trading & Markets Committee RE: ICI Member Call to Discuss SEC Roundtable on Thinly-Traded Securities Scheduled for June 18 at 1:00 pm (ET)
The SEC recently hosted a roundtable to address the market structure for thinly-traded exchange-listed securities, including equities and exchange-traded products (ETPs).[[1]] The roundtable discussed the challenges faced by participants in the market for thinly-traded exchange-listed securities and potential improvements that might be considered to the market structure for these securities. The roundtable included: a presentation of an SEC staff analysis of liquidity and market quality for thinly-traded NMS stocks[[2]] and three panels of industry experts that examined the following issues: (1) challenges in market structure performance of thinly-traded exchange-listed equities; (2) potential improvements in market structure for thinly-traded exchange-listed equities; and (3) market structure performance and potential improvements for thinly-traded ETPs.
ICI will host a call to discuss this roundtable and proposals to improve market structure for thinly-traded securities on Monday, June 18 at 1:00 p.m. (Eastern). Please contact Monique Curtis at monique.curtis@ici.org or George Gilbert at george.gilbert@ici.org to receive dial-in information for the call.
We will discuss, among other things, Nasdaq’s request for the SEC to suspend unlisted trading privileges for certain thinly-traded Nasdaq-listed securities so that liquidity in these names would aggregate on Nasdaq’s market.[[3]] The application focuses on suspending unlisted trading privileges in the stocks of operating companies and does not address thinly-traded ETPs. Nasdaq believes the suspension of UTP for these securities will promote efficiency, competition, and capital formation.
George M. Gilbert
Assistant General Counsel
endnotes
[1] A transcript and webcast archive of the meeting are available online at https://www.sec.gov/spotlight/equity-market-structure-roundtables.
[2] See Office of Analytics and Research, Empirical Analysis of Liquidity Demographics and Market Quality for Thinly-Traded NMS Stocks (April 10, 2018), available at https://www.sec.gov/files/thinly_traded_eqs_data_summary.pdf.
[3] See Letter from Edward S. Knight, Executive Vice President and General Counsel, Nasdaq, to Jay Clayton, Chairman, SEC, dated April 25, 2018, available at https://www.sec.gov/comments/265-31/26531-3515735-162293.pdf.