The SEC has just launched a new part of its website dedicated to analyzing the structure of equity markets. Here is how the SEC describes it:
The Securities and Exchange Commission created this website to promote better understanding of our equity markets and equity market structure through the use of data and analytics.
Review current staff market structure research, use interactive data visualization tools to explore a variety of advanced market metrics produced from the Commission’s Market Information Data and Analytics System (MIDAS), download dozens of data sets to perform your own analyses, and further the dialogue through public feedback.
This is a big step for the SEC. There have been problems in equity markets with high frequency trading, flash crashes and exchange failures. Often these are technology-related issues. Getting the information, research and rules out into the public is a good start in beginning to rationalize market structure.
The SEC should expand this part of the website to include information and data on the market structure of fixed income securities. Although they don’t have the technology problems that equity markets have, there is opacity in various parts of the market. There is no central place to find authoritative data on the sizes of bond markets and how efficiently pre- and post-trade pricing systems work. As I wrote to the Commission in 2008, referencing a speech made by former SEC Commissioner Laura Unger in 1999 (emphasis mine):