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Whoa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!. this is a real serious thing here. I wonder how the markets will play out tomorrow. Well then again i am pretty sure they have to sell off all there inventory first. But either way man oh man. This is going to make some major waves. Also will allow lots of smaLLer MM's to come up. MAn i can't even imagine the effect this will have. This is damn near like Nite or Jeff saying that they are done. I would love to hear everyone comments on this one.
http://www.investors.com\breakingnews.asp?journalid=22147218&brk=1 Charles Schwab & Co. (NYSE: SCH) is exiting the market-making business. It is one of several market makers that have been the subject of accusations and/or legal entanglements over naked shorting allegations and issues.
The company had said it is either the number one or number two market-maker in more than half of all of NASDAQ's (OTCBB: NDAQ) listed stocks.
Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.
The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well.
"Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander.
"Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior
of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.
"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior. We believe that only by holding all market
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That's definitely big news! I wonder if it will have an effect on the other Market Makers and they will start doing less Naked Shorting. Probably not but you never know.
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