by Erik R. Sirri
Director, Division of Trading and Markets
U.S. Securities and Exchange Commission
New York, New York
May 9, 2008
Thank you for the invitation to talk today about U.S. equity market structure. The past few years have been the proverbial "interesting times" for the equity markets. In March of last year, the securities industry capped a two-year implementation effort when it entered the trading phase of Reg. NMS. During the implementation period, nearly every exchange adopted a new, more automated trading system. In addition, industry participants overhauled their order-routing and execution systems to comply with Reg. NMS and to trade effectively on the new exchange systems. Then, after just a few months of trading under Reg. NMS, the crisis in the credit markets began in earnest, which caused a sudden doubling in fundamental volatility. Trading volumes spiked higher — particularly on those high stress days when the market responded to unexpected news.
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