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Andy Brooks is concerned about what he sees as inequities in stock markets. And as head of U.S. equity trading at T. Rowe Price Associates in Baltimore, he's doing something about it.
The 33-year veteran of the T. Rowe trading desk has, for instance, taken on order routing practices, co-location of servers in the same facilities as exchanges' matching engines, and "inaccessible" quotes and high cancellation rates in the halls of Congress, as recently as September. IMGCAP(1)
"There is a growing distrust of the casino-like environment the marketplace has developed over the past decade," he said in testimony before the Senate Committee on Banking's Subcommittee on Securities, Insurance and Investment.
Brooks expressed concern to the subcommittee about the maker-taker model, payment for order flow and internalization of orders, as well as the widespread use of co-location, which he believes creates an uneven playing field between short-term traders and long-term investors. He also warned about the blurring of the lines between broker-dealers, which now match their own customers' orders against each other's, and exchanges, which match what orders are, in effect, left over.
In an interview with Traders Magazine, Brooks talked about the challenges market participants face, as well as the next steps to address these issues. He also discussed his history at T. Rowe Price and the U.S. equities trading desk there.
"We're concerned about the erosion of investor confidence, as well as the fact that the market seems to be out of balance in terms of its orientation toward investors-geared more toward those with very short time horizons, and less toward those whom the market was originally intended to serve," he said. "We think it's a very good time to bring the industry together and try and experiment with some ways that might make...