FIA PTG Principles for Matching Systems
FIA PTG believes the question of frequent batch auctions should be subject to thorough analysis and data-driven decision making. When evaluating any market structure question we support principles-based outcomes that prioritize transparency, fairness, innovation, and market access.
Let Trading Venues Determine Which System to Offer
In determining a matching process trading venues are uniquely positioned to evaluate the efficacy of matching systems by analyzing the specifics of each market and the requirements of market participants. Deciding the most suitable matching process for specific products should not be government-directed, but instead should be determined by a free market system where, subject to the concepts of fairness and integrity, market participants are free to transact in a manner they choose.
Analyze Costs and Benefits
Cost-benefit analysis helps ensure market participants are benefiting from the most appropriate matching processes. Exchanges have conducted cost-benefit analyses and consulted with market participants about what changes in matching processes would mean for market quality. In some situations, the change has been rescinded because it has not benefited market quality in the manner anticipated.
Base Decisions on Data
We support the commitment by the CFTC and SEC to a disciplined, data-driven approach to market structure issues. When the CFTC and SEC conduct their reviews of market structure, we expect that they will apply the same data-driven analysis to evaluating the frequent batch auction concept and that this analysis will help inform the public as to the merits or risks of the idea.