October 07, 2021 The Great Return: Virtu and Robinhood Take the Stage at STA’s 88th Annual Market Structure Conference Samuel Belden Forefront Communications TabbFORUM Editor at Large Follow | Profile | More Share On Wednesday, the Security Traders Association kicked off its 88th Annual Market Structure Conference in Washington, D.C, dubbed “The Great Return.” Highlights from Day One included sessions featuring industry leaders like SEC Commissioner Allison Herren Lee, Virtu Financial CEO Doug Cifu, Robinhood Chief Legal Officer Dan Gallagher and others who offered their views on key industry issues. On Wednesday, Security Traders Association kicked off its 88th Annual Market Structure Conference in Washington, D.C. Dubbed “The Great Return,” the event marked STA’s first national, in-person event since the start of the pandemic. Over 400 attendees representing exchanges, brokers, buy-side firms, regulators, media and more donned their masks and gathered in the nation’s capital to discuss some of the most pressing issues facing our markets today. As with many STA events, the program featured a strong presence from regulators, elected officials and other government employees. In a conversation with Mina Nguyen of Jane Street, SEC Commissioner Allison Herren Lee shared her views on a range of topics, including digital assets. “In terms of regulation of cryptocurrency, I don’t think we want to get into a competitive race with other jurisdictions because that could easily turn into a race to the bottom,” Lee said. Michael Piwowar, former SEC Commissioner and current Executive Director of the Milken Institute Center for Financial Markets, echoed this view, stating that regardless of what specific regulatory frameworks may coalesce around digital assets, investors need clarity above all else. There will be a dedicated panel on digital assets during the Thursday program. Payment for order flow, the retail boom and meme stocks were other important topics in the spotlight. Piwowar and Mark Uyeda, Counsel to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, discussed these issues at length during their panel, as did Lee. “With respect to payment for order flow, we have to dig into the data around order handling practices, focusing on some of the inherent conflicts of interests,” Lee said. “At a minimum, there needs to be adequate disclosure and best execution requirements must be met.” The afternoon culminated with interviews with representatives from two key players in this debate: Virtu Financial CEO Doug Cifu and Robinhood Chief Legal Officer Dan Gallagher. Cifu hit back at detractors of payment for order flow, stating that routing decisions are overwhelmingly based on execution and price improvement, not opaque business agreements. “Payment for order flow does present a conflict of interest, but those are common in our industry. The way we deal with conflicts is disclosure,” Cifu said. “The inherent conflict in this instance has been mitigated. What is so pernicious about this conflict that it needs to be eliminated?” Gallagher agreed, stating that Robinhood’s router is calibrated for best execution. He also defended his firm against critics of free trading apps and so-called gamification. “Our customers care about ease of use and fees. It bothers me when they’re called stupid,” Gallagher said. “Just because they’re new to the market doesn’t mean they need to be protected from themselves in a way that would probably prevent them from being in the market in the first place.” Other topics in the spotlight included listed options market structure and the potential move to T+1 settlement. One lively panel on best execution in equities and options, featuring representatives from BMO, DASH Financial Technologies and Financial Information Forum, saw disagreement around tiered pricing, applying Rule 605 to options and more. Of course, it wouldn’t be an STA event without some amount of focus on the human elements that define our industry. One of these is increasing diversity. During the STA Women in Finance panel, Heather Brilliant, CEO of Diamond Hill Capital Management, shared her views on cognitive diversity, inclusive hiring practices and more. Stewardship and service are other important qualities – the strength of our markets is a direct result of people dedicating huge amounts of time and effort to keep them humming. The Wednesday program closed with the presentation of the STA Foundation’s Dictum Meum Pactum (“My Word Is My Bond”) award to Tim Mahoney, former CEO of BIDS trading. Mahoney was recognized for his 40-year career of integrity and professionalism, including service on countless committees, boards and panel discussions over the years. Cifu summed it up during his interview, which was moderated by Mahoney: “This is a great guy.” The coming days will feature a wide range of highly anticipated sessions, including interviews with NYSE Group President Stacey Cunningham, U.S. Representative Bill Huizenga and former CFTC Chairman J. Chris Giancarlo, the digital assets panel, the presentation of STA Foundation’s Big Heart for Charity Awards and more. Stay tuned for more updates from DC! • • • Sam Belden is an Account Executive at Forefront Communications, where he leads the firm’s content efforts. He has written for a diverse group of firms including LiquidityBook, OpenFin, Security Traders Association, Tourmaline Partners and Xignite, and his work has appeared in numerous capital markets and fintech-focused publications. In a past life, he was a sportswriter whose work appeared on outlets including Business Insider, Golf.com and numerous baseball blogs. He is a graduate of Fordham University.