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Grasso, Aberdeen: Markets are Unfair

Dick Grasso, the former CEO and a 35-year veteran of the NYSE, recently suggested that the U.S. markets are not fair. He argued that “a fast market is not necessarily a fair market” and suggested that recent events, such as the volatility on August 24, erode investor confidence in the markets. Grasso also took aim at the sale of proprietary data feeds by exchanges: “Creating an advantage to an institutional user or a particular type of trader that disadvantages the retail investor is bad for the country, bad for the markets, and bad for your business.”

He also addressed Regulation NMS as a “sad experiment” and argued that “the structure of the market today for major securities has been terribly hurt by a series of initiatives over the years and I don’t think investors have benefited.” Grasso suggested that the rule was not written with the reality of the current number of trading venues in mind.

Anne Richards, the Chief Investment Officer of Aberdeen, one of Europe’s largest asset managers also stepped into the debate. Richards recently suggested that U.S. exchanges should act to reduce the advantage of high-frequency traders, according to the Financial Times. She argued that “[b]uffering orders on exchanges, even by a millisecond, would ensure that all orders come in at the same time.” She complained that “[a] bunch of these guys never have a down day. That’s bucking the odds by a substantial amount. It can’t be just cleverer machines, so there must be something structural in play.”