While there are certainly benefits to the LSOC model that could make it worthwhile, the Professor does not fully acknowledge the much greater costs and higher margining requirements that the actual implementation of this model would require. Further, he likely overestimates the benefits of an insurance system for this particular market. Most institutional investors, who constitute most of the participants in the futures markets, are generally indifferent to insurance because the amount…

Commissioner Stein's statement that dark pools may no longer "perform the functions that were originally intended" is worth analyzing: by whom were they intended? Dark pools were never contrived by the regulators; rather, dark pools were a reaction by market participants to a regulatory scheme that was controversial when adopted. Two Commissioners dissented. Anyone who rereads those…

Readers of Dr. Litan's article and related testimony should be able to answer the Senator's questions concerning affiliations and funding. Attached please find links to both. The cover page of Dr. Litan's study contains the following language: "Robert Litan is a non‐resident senior fellow at the Brookings Institution and senior consultant to Economists Inc. Hal Singer is a senior fellow at the Progressive Policy Institute and a principal at Economists Inc. Funding for this paper was provided…

Because the MFA's comments about the benefits of market study tests are intentionally unspecific, they might go unnoticed, and that would be a shame. The SEC should be conducting ongoing tests of market structure rules to see what works and what does not instead of relying on accepted wisdom. Obviously, such testing is expensive and imposes costs on the industry. Accordingly, it is important that any such test be well designed and, ideally, part of an overall testing strategy. In the best…