JLN: SIFMA’s Ellen Greene Discusses Key Concerns and Expresses Optimism at Options Industry Conference

The following blog was originally posted by John Lothian News on June 28, 2024.

Ellen Greene, managing director of equity and options market structure at the Securities Industry and Financial Markets Association (SIFMA), shared insights on key industry concerns at the Options Industry Conference in Asheville, North Carolina, in an interview with John Lothian News sponsored by the OCC.

Greene expressed cautious optimism about the overall health of the options market, noting that volumes continue to grow, averaging over 47 million contracts traded daily in 2024. She emphasized the importance of investor access and the tools provided by retail firms for making informed trading decisions.

However, Greene raised several concerns about recent regulatory proposals and market structure issues:

  1. Consolidated Audit Trail (CAT): SIFMA has reservations about the CAT’s data security and fee structure. Greene highlighted that the industry will bear about 85% of CAT’s costs, with executing brokers facing a disproportionate burden. She advocated for improved governance and industry input to potentially reduce costs and enhance security.
  2. Short-dated options: Greene cautioned about the expansion of short-dated options to single-name equities, citing potential risks for retail investors due to after-hours market movements.
  3. SEC equity market rule proposals: SIFMA questions the necessity of proposed rules like the Best Execution proposal and the Order Competition Rule, arguing they could disrupt current market structures that function well for investors.
  4. Options regulatory fees: Greene called for greater transparency and fairness in how exchanges collect these fees, suggesting a model where exchanges only collect fees for transactions on their own platforms.
  5. OPRA (Options Price Reporting Authority): Following recent outages, Greene stressed the need for improved transparency and communication from OPRA regarding system issues.

Greene also touched on ongoing litigation challenging the SEC’s approval of the CAT fee plan and the potential constitutional issues surrounding government access to personal information in the CAT database.

Greene finished the interview with this statement when asked what she would say to SEC Chairman Gary Gensler if she was going to have dinner with him: “I’ll say this, the Chair (Gensler) should keep in mind that we have the deepest, most liquid markets in the world. The U.S. capital markets are the envy of the world. So, you know, unless you’re really identifying something that’s wrong with the market structure, it seems really shortsighted to make tweaks to it, which could actually harm investors in the long run.”

Ellen Greene is Managing Director, Equity and Options Market Structure at SIFMA. In this capacity, she is the staff advisor for both the Equity Markets & Trading Committee and the Listed Options Trading Committee. Ellen also leads SIFMA’s advocacy work on the Consolidated Audit Trail.