Regulatory Initiatives: Implications for Competition and Efficiency
ROBERT SCHWARTZ: I interact regularly with Frank Hatheway. Over the years, Frank has been most helpful to me. Moreover, we share something in common: Both of us are professors. On that note, it is a pleasure to have you with us here today, Frank.
FRANK HATHEWAY: Thank you very much, Bob. Let’s start with a question for the panel. As Erik Sirri of the SEC noted earlier today, investor protection is the big enchilada for the regulators. For the most part, efficiency and competition are secondary objectives for them. Indeed, efficiency and competition have to co-exist with the regulatory obligations of the brokers and exchanges. In addition, you have the technological changes and the associated costs that were discussed this morning. So, from your organizations’ perspectives, and from your own perspective as experts in this field, my question is this: Is regulation driving competition and efficiency? Or is the process more reactive? Is competition actually making us more efficient? Is competition driving us to achieve certain things that will then alter the regulatory landscape? Len….