Logan Flatt, CFA

Learn when #crypto use cases will really take off and so much more on Ric Edelman, CBDA podcast with Galaxy Christopher Rhine, CFA https://lnkd.in/g22zmtte

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Texas Stock Exchange, Reg NMS, and broken US equity market structure Two weeks ago, it was announced that the Texas Stock Exchange, backed by BlackRock and Citadel, would aim to become the 16th national securities exchange for trading US equities. This news serves as a backdrop for the below discussion of problems with today’s US equity market structure. The SEC’s Regulation National Market System (Reg NMS) requires that all US equities trades be executed at a price equal to or better than the National Best Bid or Offer (NBBO). The NBBO is computed based on the best prices displayed on all of the “lit” exchanges, i.e. the venues that are registered with the SEC as national securities exchanges. There are currently 15 such exchanges. To comply with Reg NMS as a broker-dealer or exchange, one must pay for and subscribe to the market data feeds of every lit exchange, or else pay Nasdaq or NYSE for their SEC-sanctioned consolidated NBBO feeds (which indirectly pays each exchange). The yearly costs for these subscriptions run in the high 6-figures, even 7-figures if subscribing to the fastest order-by-order feeds from these exchanges, such as Nasdaq’s FPGA ITCH feed. As Matt Levine and Katie Greifeld discussed on last week’s Money Stuff podcast, once TXSE becomes a regulated lit exchange, every broker-dealer will be required to subscribe to TXSE’s marketdata either directly or indirectly, a guaranteed income stream for TXSE even if it ends up with no meaningful trading volume. Competition in markets through multiple trading venues is generally good. But this regulation-subsidized arrangement results in a proliferation of trading venues with often little differentiation between them, other than listing standards and fee structure (inverted vs maker-taker, etc.). For brokers or exchanges that perform NMS-compliant order routing on behalf of customers, there are especially high operational costs from having to connect to each exchange directly and implement each exchange’s particular order protocol (Nasdaq OUCH, Cboe BOE, NyseArca Pillar). The regulatory burden and operational overhead are in part why so many banks, trading firms, and other entities have created their own Alternative Trading Systems (ATSs) for executing US stocks. These ATSs are not included in NMS because they do not display their quotations or order books (and are referred to as “dark” venues, or “dark pools”). There are dozens of both registered and unregistered ATSs with potential sources of liquidity. In order to source the best possible price in the market, brokers pay for and maintain connections to a large number of these dark venues in addition to lit exchanges. (Continued in comments)

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TXSE aims to make Texas the next financial hub for businesses looking to list publicly, attempting to break the duopoly held by NYSE and Nasdaq since 2000s. #texasboom #capitalmarkets #public #trading #financialhub #equitymarkets

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Get ready! #NAVday is here on #FundFanatics Joined by Jed Johnson from ORIX Corporation USA and Scott Aleali. ✔️ #NAVFacility to make a distribution? ✔️ What does Institutional Limited Partners Association (ILPA) have to say? ✔️ Is a Hybrid really a NAV? ✔️ Is NAV the new pretend and extend? ✔️ Fly Fishing anyone? #PrivateEquity #PrivateCapital #SubscriptionFacility #FundFinance

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We've just released a new Dataset and Research to go along with it - US SEC Filings. We use sentence level classificationto extract insights from 10-K's and 10-Q's filed with the SEC. There are over 690 Million sentences currently in the dataset. That should be a enough to keep you busy over the holidays! https://lnkd.in/e-pSiPqa

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Let's see if I understand this correctly. If you're a bank depositor supporting your local bank in rural Oklahoma, and you deposit more than the insured limit, you suffer the loss when the bank fails. If you're a bank depositor with a large balance in politically-connected Silicon Valley (mostly sophisticated depositors, who should've known better), you get bailed out and do not suffer the loss. That doesn't sit well with me. Once you make a rule and publish it the rule should be enforced consistently. Is it any wonder faith in government keeps falling? https://lnkd.in/gK-cPxhG

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Updating results from Gao, et al [2014, 2017] below where they used data until 2013. Alpha decay or data mining? One of toughest question to decipher when running strategies. Any good resource in determining appreciate it in comments. https://lnkd.in/eSckpDAA

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👀 ... Texas National Stock Exchange in the works?! ✔ Pro-crypto state ✔ Blackrock $375M Tokenized Treasury Fund ✔ Bitcoin ETFs ✔ Ethereum ETFs ❌ SAB 121 We're seeing States stepping up to deliver solutions to these new market challenges and opportunities. Regulatory-Compliant Custody demands are only going to go parabolic! I hope the US isn't missing the largest wave of financial innovation since the Lydian Stater with the recent SAB-121 misstep. What's the future hold for us Satoshi Action Fund? #Custody #DigitalBanking #DigitalAssets

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#FDX became the first #standardsettingbody for #openbanking rules: #CFBP laid out a few conditions: ➡️ Standards must be developed without consideration of “#paytoplay,” such as “sponsorships or other financial incentives to give certain market players secret information or any other advantage” ➡️ FDX must report to the CFPB or make public a resource that lists company disclosures of standards usage and certifications of compliance ➡️ FDX must make publicly available any information about the consensus standards it implements, plus insight into its “development and issuance processes." Congrats Porche Matthews and your team! #digitalbanking #corebanking #bankingsolutions #payments #fintechsolutions #digitaltransformation #fintech #baas #neobanks #challengerbanks #embeddedfintech #creditunions #communitybanks #embeddedfinance #nichebanking #bankasaservice #creditunions #communitybanks #startup #banktech #merchant #consumergoods #supermarket #grocery #retail #payment #venturecapital #tax #cpa #accounting #finance #accountingtech #bookkeeping #smallbusiness #smallbusinessfinance

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Exciting news for Texas and the broader investment commmunity. While there is considerable work to move from this announcement to a new fully functional, highly liquid, electronic capital market we look forward to the increased competition for order flow. Sometimes timing is everything. With the depressed levels of IPOs in the recent years this exchange could potentially launch into wave of IPO activity as the backlog is worked down in the coming years. We will be watching the development of TXSE closely and with James H Lee and team the best of luck with the upcoming launch. #txse #ipo #capitalmarkets #liquidity

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We're excited to announce some of the latest happenings here at Kitces.com, such as not only continuing to offer IAR CE through Nerd's Eye View blog articles, but, starting this year, expanded IAR CE eligibility to our webinars as well, along with more frequent CE webinars and reinvesting heavily into making the platform easier to use. Here are some highlights for this year so far: -The Return of Kitces IAR Ethics CE Day: August 29, 2024 -New "Optimizing Roth Conversions" Course -Expanded Support For Multi-Advisor Groups And Large-Firm Enterprises -New Kitces Marketing Study Results On How Advicers Actually Do Marketing -Upcoming Opportunities With Our Kitces Team Of Nerds https://bit.ly/3VVEq1s

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Lee Reiners, CFA , a fellow at Duke Financial Economics Center published an excellent piece today in The Wall Street Journal. He argues that combining the SEC and CFTC would save money and streamline generally and also make it easier to implement crypto-friendly legislation which calls for a dual jurisdiction over crypto. Crypto-friendly legislation will not make worthless unbacked and useless crypto valuable. It will just make it easier for the crypto industry to rip off more people. So, when the reckoning happens, the losses will be greater. For background, see my book "The Coinmen" ( https://lnkd.in/gWypmnHM ). https://lnkd.in/gpSJ9ngp

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$AMD remains higher by nearly 8% pre-mkt, ($149.50 vs. 138.44 close) Very notable was the upside to its MI300 GPU outlook of 4.5b (500mm above prior guidance) https://bit.ly/3zhabe3 Breakdown of May lows made this difficult to have confidence technically prior to earnings & even on bounce, has some work to do before regaining some strength- Note that stock is finding resistance near prior mid-June lows @Marketsurge chart by @IBDinvestors below #IBDPartner

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Powell's Schrodingers Cat! We have been here before. As we had discussed last week, a 4.17% yield on the UST 10yr was a significant technical level that we need to hold because the next stop was 4.30%. We didn’t expect it to happen so fast but after we broke 4.17%, we handily took out 4.30% on 10/28. Since then there is a battle going on at the 4.32% level with the next stop 4.50%. This market is eerily reminiscent of the end of 2018. The markets are wavering on Fed policy that some feel is lagging reality. Our view still is “Higher for Longer” and the haves and have nots that will result from” Higher for Longer”. This has caused volatility to seep into credit and equity valuations. The difference between 2018 and now is we have an election next week with the potential to not have a decisive outcome on the day of the event. Such a result will no doubt lead to more volatility and unease. The fulcrum for this volatility will be the stock market. If we see a correction in the stock market given the outcome of the election…regardless of who wins, the Fed will pivot their focus from “data dependency” to focus on price stability. What has kept us under firm footing….strength in technology…is seeing some signs of weakness. On a brighter note, corporate balance sheets are in very good shape, as are reserves at all the banks. The untested risk and the elephant in the room is the impact of “Higher for Longer” and whether a large swath of the private markets become the “have nots”. The reason this is worth watching is as the private credit market has exploded, the competition for private assets has driven their prices uncomfortably close in our opinion to the public market valuations. Corporate spreads have been firm but dollar prices especially in HY are lower and in some sectors much lower. So like 2018 we have reduced risk and are waiting for a clear direction in the market.

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Dodd-Frank’s section 1033 is a term that’s become synonomous with “open banking”. It was released 14 years ago and the final rule, at almost 600 pages, was announced last week. It never occurred to me to read the original. Here it is: all 70-some words of it, which I pulled out of Jason Mikula’s weekly newsletter #openbanking #1033

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The much anticipated Dodd-Frank 1033 rule was announced by the CFPB today. This marks a critical step in securing strong data rights for consumers in financial services. Plaid was founded on the belief that consumers should have a right to access and share their financial data in order to get the financial products that work for them, and we are proud to have played a small role in creating a thriving, competitive and dynamic digital financial system – one that holds so much promise for consumers as the industry becomes fully digitized. What does this mean for you? If you’re building products that leverage open banking, we’ve created a useful 1033 readiness checklist for you (https://lnkd.in/extB6r94) that we will continue to update. If you have customers that link accounts with other apps and services, we’ve created a suite of open finance solutions (https://lnkd.in/gUyX8by8) that help you better prepare. We’re excited to be part of this new era of open finance and to support our customers, partners, and consumers in this regulatory shift. Stay tuned for more insights and updates. Read more about what this new regulation means and next steps here: https://lnkd.in/gbcPvUMH

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🚨WYOMING LEGISLATURE COMMITTEE voted to draft 2 bills: 🔥1. Require the #Wyoming Treasurer to apply for a Fed master account, just like Texas has, & saving the State millions in payment fees annually. 2. Reverse the agreement Wyoming cut with the Fed in 2018, since the Fed reneged on it by not granting Fed master accounts to chartered Wyoming #SPDI banks. Wyoming would add back the statutory language that the Fed really hated. But the bill would be broader and also require the Wyoming Attorney General to sue to protect the dual banking system from overreaching, politicized DC bank regulators, and to fight back against #debanking. See last ~10 mins of video here: https://lnkd.in/gkkzXEaV

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