Chester Spatt Testifies before SEC’s Investor Advisory Committee

On March 28, 2019, Chester Spatt, a distinguished senior fellow at the Golub Center, testified before the SEC’s Investor Advisory Committee as part of its panel on stock exchanges.

Spatt served as the SEC’s Chief Economist from 2004 to 2007, a period which included the adoption and implementation of Regulation NMS, the end of specialist system, the conversion of the New York Stock Exchange into a for-profit exchange and the founding of FINRA. He pointed out that many of those developments highlight the potential value to reviewing the role and governance of exchanges in our regulatory system and especially the nature of their ongoing SRO responsibilities and potential conflicts between the profit-maximizing goal of their own exchanges and other market participants, such as broker-dealers. Because of the prior regulatory developments and changes in technology, the nature of the exchange model and its revenue base have evolved substantially, but on a number of fronts changes in the regulatory environment have not kept up.

His full statement can be found here.