Thursday, November 17, 2016 Stamford, CT USA — Investors and brokers in U.S. equities are facing a host of market structure issues, many of which have been debated since the passage of Regulation NMS and others that have come to the forefront in recent years. Despite the controversy around these topics, they remain largely unresolved.

A new report from Greenwich Associates examines the viewpoints of institutional investors on issues including maker/taker pricing, co-location, trade-at rule, the Tick Size Pilot Program, impact of MiFID II in the U.S., and dark pool caps. 

The report, Investors’ Take on Market Structure Issues, presents the results of interviews with 55 equity traders on the “buy side” — a critical constituency in U.S. equity markets composed of institutions that manage pensions, 401(k)s and other investments. Among other findings, the research uncovers a highly pessimistic view of the recently launched tick-size pilot, with only 9% of buy-side traders believing it will improve liquidity in small cap securities. In addition, these traders by a wide margin thought it more likely that the pilot program will increase, rather than decrease, execution costs.

“Given the significant implications of proposed changes to market structure, it is important that the views of all market participants are taken into consideration,” says Richard Johnson, Vice President of Market Structure and Technology at Greenwich Associates and author of the new report. “For example, the SEC’s Equity Market Structure Advisory Committee is considering an Access Fee Pilot – however, our research indicates that institutional investors would prefer the regulators take an entirely different direction.”