Last week I was asked who is in charge ? Massive fines but sadly no order of command !
Recently exchanges have been seeking more autonomy , greater profitability and therefore greater power ................. THEY have now stated that "only exchanges should be voting members in committees !"
The last decade exchanges have moved from not profit organisations to For profit and have held back nothing in pursuit of a new member/ liquidity or pursuit of new volume . This status has totally struggled to maintain their "fair & orderly status " New
strands of rebates , market making , co - location and HFT are now all part of the debate . Recent arguments have fairly criticised the exchanges self regulatory authority,which gives exchanges the powers to maintain "fair & orderly markets " in the
absence of an government regulator . This is interesting as certain court cases prove .........Navindar Sarao appears to have "spoofed " a fortune over a decade un interrupted by any exchange ! This appears that exchanges to be allowing abuse and manipulation
than attempting to stop it . Sarao was a very large liquidity provider and a profit source for many an exchange .
The Cattlemens Beef association are totally correct in complaining about their futures market , especially to volatile limit price movements, and now struggle to have a hedging tool to protect their business ; sadly CME appear to have sided with HFT rather
than the retail trader ! Alarm bells should be ringing . Recent fines from the french regulator of $5 million euros to both Virtu financial and the Paris euronext exchange proves exchanges need as much supervision as traders ! Virtu 96% cancellation rate
cannot be a useful tool to retail trade or even to real liquidity ? Previous old traders , Paul Rotter , claim Eurex exchange allowed his spoofing and layering trades as it increased volume & liquidity ; 150 K round turns a day justified his trading .
This only proves that exchanges are in need of serious market supervision and hopefully common sense may prevail and an independent regulator appointed ASAP .
Sadly this will not happen as funds are lacking despite massive fines being imposed . Last week CFTC , Timothy Massad ; at a budget hearing stated that his agency does not have the monies available to inspect firms or exchanges it regulates ; or
to pursue all the enforcement cases it would like including spoofing or metal scams . I struggle with Tim Massad ; as if I were a bank would
I tell a bank robber that the alarms were turned off ? Most market abusers are aware when they can both abuse and gain most profit and normally when regulators were asleep . Finally Massads costing looks stolen as recently billions of $ of fines appear
to have been misplaced and a % not returned to improve beating or controlling market abuse . Hopefully governance will oversee a very narrow view from our echanges ?