Photographer: Michael Nagle/Bloomberg

SEC Disbands Group of Advisers on U.S. Stock Market

  • Committee’s suggestions failed to gain much traction
  • EMSAC convened in 2015 to consult on equity market issues

The U.S. Securities and Exchange Commission disbanded a panel of industry advisers whose recommendations on improving trading in the world’s largest stock market largely landed with a thud.

The regulator on Wednesday emailed members of the Equity Market Structure Advisory Committee, informing them it was being dissolved, according to two people familiar with the matter. The group, created in 2015, was authorized through Tuesday. Ryan White, a spokesman for the SEC, declined to comment.

The group tried to tackle some of the market’s biggest controversies, including how to prevent a repeat of the haywire session in August 2015 that saw exchange-traded funds untether from their underlying holdings. But the SEC has yet to act on suggestions. The agency has, however, indicated it would like to follow the committee’s recommendation for a test program to study the incentives exchanges pay traders to stir volume.

EMSAC died the same week that a similar panel created for the bond market holds its first meeting. The Fixed Income Market Structure Advisory Committee, created last year, gathers in Washington on Thursday. Much of the bond market is less modern than the stock market, suggesting it’s in need of more examination. Equities are roughly two decades into a shift toward automation, whereas much of fixed-income trading remains manual. SEC Chairman Jay Clayton said in July that he wanted to boost the agency’s focus on bonds.

The equity committee featured representatives from some of the stock market’s biggest players, including Citadel Securities, Cboe Global Markets Inc. and T. Rowe Price Group Inc. Notable exceptions included two of the biggest exchange owners, New York Stock Exchange parent Intercontinental Exchange Inc. and Nasdaq Inc. (One panel member came from Bloomberg LP, the parent of Bloomberg News.)

The new bond group also pulls from the industry, with members coming from BlackRock Inc., Pimco and the city of Chicago.

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