Sep 12, 2023 • 16 tweets • 3 min read
Today @GaryGensler will be testifying before the Senate Banking Committee at 10am ET. You can watch the livestream here:
His written testimony is here:
The testimony is written at a very high level, but gives a good overview of the full scope of the SEC's activities and current agenda. I'd encourage everyone to take a look - and importantly the equity market structure reforms that we care so much about are the first agenda items addressed.banking.senate.gov/hearings/09/06…
banking.senate.gov/imo/media/doc/…
@GaryGensler First question from Sen Crapo is about MMTLP - he is asking whether the SEC is reviewing the trading halt, and whether the SEC will release the results of the investigation.
Gensler answers that FINRA rules govern this issue, and that the SEC was not involved.
Dec 20, 2022 • 6 tweets • 2 min read
This is my shocked face. We said exactly this to the SEC in our June meeting, because it was admitted by a big wholesaler on CNBC. 
So... maybe... I dunno... eliminate rebates and PFOF? 
Dec 14, 2022 • 16 tweets • 3 min read
Open Meeting has just moved on to the new equity market structure reforms, starting with Rule 605. https://twitter.com/dlauer/status/1603057688228896769
Big changes to Rule 605 will provide far more transparency on execution quality by broker and market center. This update is first in over 20 years and long overdue.
First - it's extended to brokers with > 100k customer accounts (retail brokers).
Dec 14, 2022 • 14 tweets • 4 min read
SEC open meeting getting ready to begin here:
sec.gov/news/upcoming-…
🧵A high-level thread with our initial view of the proposed rules, which are split into four proposals.1. Changes to Rule 605 that will modernize execution quality disclosures and extend those disclosures to retail brokers.
Dec 14, 2022 • 13 tweets • 4 min read
Today the SEC proposed the most significant changes to US market structure since Regulation NMS was passed, in 2005. These proposals incorporate many of the ideas that we - #WeTheInvestors - presented to the SEC earlier and repeatedly this year.#WeTheInvestors have had a significant impact on the SEC’s actions - through our dialogue, our proposals, and our presence. These rule proposals are the culmination of those efforts.
Dec 13, 2022 • 7 tweets • 3 min read
It's going to be quite a day today! SDNY will unseal their indictment and the FTX hearing in the House will be even more interesting now. SEC has also charged SBF with securities law violations, complaint here: sec.gov/litigation/com…The SEC complaint doesn't tell us much we didn't already know, but really lays it out simply. He diverted customer funds, Alameda had unlimited credit lines against customer funds and when Alameda couldn't satisfy their loans they raided more customer funds. 
Dec 10, 2022 • 5 tweets • 2 min read
I've seen so many questions about MMTLP and the FINRA halt. My understanding is that trading was halted because shares purchased on 12/9 wouldn't have settled in time - if you bought shares, you'd have simply been ripped off. This was explained by co here:
metamaterial.com/meta-materials…I know this isn't the answer most people want, and regulators don't get the benefit of the doubt anymore, but this seems like a straightforward case of investor protection.
Dec 7, 2022 • 9 tweets • 4 min read
As expected, the SEC has given notice for an open meeting in a week - Dec 14, with an aggressive agenda that will be the biggest overhaul of US market structure in 17 years.
sec.gov/os/agenda-open… https://twitter.com/dlauer/status/1595072309068533762
The first item on the agenda is a long-overdue update to Rule 605, execution quality disclosures. I expect we will get updated, modernized metrics (something I've been pushing for 10 years now) along with the expansion of 605 to include internalization. 
Nov 22, 2022 • 15 tweets • 7 min read
I can confirm I've heard similar things as has been reported publicly - the SEC is moving towards a Dec 14 vote on a proposal that will be the biggest overhaul of markets since Reg NMS in 2005. Here's what I think this will look like. 🧵The proposal sounds comprehensive, w/ 6 main parts: Best Execution, Retail Auctions, Rule 605 Reform, Tick Increment Changes and Harmonization, NBBO Reform and Market Data changes. This lines up with what @GaryGensler has said publicly for the past 6 months since his June speech.
Nov 10, 2022 • 16 tweets • 6 min read
A quick thread on DRS - holding shares directly w/the company in your name. Most individual investors buy shares with a broker & those shares are nearly always held in "street name." This means they are held under the broker's name. The buyer is not visible to the issuer.Despite holding shares in "street name" you are still supposed to have all of the rights that come with holding shares, including dividends and the ability to vote. However, that is not always guaranteed.
Oct 28, 2022 • 13 tweets • 3 min read
Here’s a disturbing - but not surprising - thing I heard this week. A reliable source told me that a Republican rep recently heard from his constituents - YOU all - about Gamestop. The people had concerns about shorting, PFOF and internalization, and all the craziness in markets.The rep went to one of the most senior Rs in the House and said "my constituents care about fairness in markets, what can we do about that?" He was told to FORGET about it because of their donors: "you don't want to mess with these people. You don't know what you're wading into.”
Oct 6, 2022 • 10 tweets • 3 min read
Ok, so often when you bring up naked shorting and FTDs with anyone in the industry, they will say that it used to be a problem but Reg SHO fixed it. The claim is always that this is not happening anymore because of robust compliance and enforcement. UBS would like a word... 
This week UBS was fined $3M in two actions by FINRA and censured. The actions were straightforward, they did not properly close out FTDs. They sold stock that they did not have, and then they did not deliver that stock. FOR NINE YEARS.
finra.org/sites/default/…
Sep 8, 2022 • 9 tweets • 3 min read
Seems like a good time to revisit the IMC enforcement case. I've seen two main reactions to this:
1) None. The press appears uninterested, industry wants to sweep it under the rug.
2) Why was the fine so small? This is just a cost of doing business.
I want to focus on #1. https://twitter.com/dlauer/status/1559201020332457984
The PFOF industry wants this case to be swept under the rug because it's a really big deal. This is essentially the SEC declaring that OTC "market making" is not eligible for the locate exemption under Reg SHO - they are not engaged in "bona fide market making." 
Aug 15, 2022 • 6 tweets • 4 min read
In US markets, market makers are allowed to sell stock short without having located shares before doing so. This exemption to Reg SHO's locate requirements is ripe for abuse, and the @SECGov has just fined IMC $125k for abusing this exemption.
sec.gov/litigation/adm… 
@SECGov To qualify for such an exemption, you must be a "bona fide market maker" which in itself is a relatively outdated concept. Market makers don't have affirmative obligations anymore, and it's questionable whether they even need this exemption.
Aug 4, 2022 • 7 tweets • 2 min read
I think this is something a lot of industry pros are missing. Retail has completely changed the game in markets. The relationship between issuers and investors is being transformed, and part of that is spillover from web3 -> tradfi. This has far reaching consequences. https://twitter.com/alexisohanian/status/1554985794590461952
Crypto and web3 have created (or brought back, depending on how you look at it) a decentralized and direct ownership model. Retail investors who are directly registering their shares are bringing that mindset into securities markets.
Aug 1, 2022 • 5 tweets • 1 min read
Sounds like the GME stock split/dividend has completely destroyed some brokers back-office systems - I keep hearing about the nightmare of dealing with TDA. Also sounds like overseas brokers are having serious problems, and German brokers are struggling getting shares to people.My opinion is that at this point, it's a bit late in the game. If you still haven't received your shares, it's time to get concerned. For US brokers, you should push hard to get to someone senior who can help. Overseas it's less clear to me what your options are.
Jul 29, 2022 • 6 tweets • 2 min read
IEX and the SEC have won their case on the d-limit order type!BREAKING: Citadel does not represent retail investors.
Jul 29, 2022 • 13 tweets • 4 min read
We're about to cross 1,600 investors in our company through crowdfunding. It's such a unique way to fund a company, and I love giving everyone the chance to get in on the ground floor - it's usually only available to institutions/HNW.
Join us if you can: wefunder.com/urvinfinance https://twitter.com/dlauer/status/1551936224272719877
Our company will give individual investors access to unprecedented data and tools, and our data native social platform will change how research/DD is created, collaborated on, and shared. We're also proud to be helping #WeTheInvestors get off the ground & change market structure!
Jul 8, 2022 • 7 tweets • 2 min read
Ok - I've found there's confusion everywhere (in the industry and online) about how all of this will work. The problem is that it's a unique combination of a dividend and a split, and it actually has the characteristics of both. https://twitter.com/dlauer/status/1544836580795375619
Part of the confusion is that there are standard dividend dates as part of the corporate action and announcement (record date, pay date, ex date) similar to a dividend. However, most of that doesn't make sense in the context of a split.
Jul 6, 2022 • 6 tweets • 2 min read
Gamestop just announced a four-for-one stock split.I guess I was off when I said it would likely be 3-to-1.
Stock will trade on a split-adjusted basis starting July 22.
Jun 24, 2022 • 21 tweets • 10 min read
The House Financial Services Committee released a 183 page report on what the events of early 2021 exposed in terms of market weaknesses, conflicted business models, and the various problems exposed by retail interest. I haven't read it yet, but will send out thoughts when I do. https://twitter.com/RepMaxineWaters/status/1540318859915313155
Wow - moving those names to PCO was extremely effective in generating sell pressure and reducing collateral requirements. 
