ISE Publishes Proposal for U.S. Regulatory Reform
March 25 2009 - 3:00PM
Business Wire
- ISE calls for creation of a new
Financial Markets Commission (FMC) to oversee all U.S. financial
markets and trading platforms.
- Regulatory regime should create
a level playing field for all trading venues, regardless of
exchange status.
- Regulation should be risk-based
with a results-oriented focus on compliance to ensure
comprehensiveness and promote efficiency.
The International Securities Exchange (ISE), the world�s largest
equity options exchange, today announced that it has published a
proposal outlining its recommendations for reforming the regulation
of U.S. financial markets. As one of only seven U.S. securities
exchange operators, ISE brings a unique perspective to the current
public debate and has set forth recommendations that specifically
focus on the oversight of market operations and trading venues. In
the proposal, ISE details a risk-based regulatory framework built
on clearly legislated regulatory objectives and designed to
proactively maintain an orderly and efficient marketplace for all
participants. This approach promotes comprehensive, consistent and
ongoing oversight for all types of trading venues while addressing
the global nature of the markets and promoting the innovative and
competitive edge of the U.S. financial industry.
�In addition to joining others in identifying the need for a
systemic risk regulator, ISE�s proposal outlines our views on the
most effective approach to overseeing the proper functioning of the
financial markets and trading platforms � an equally vital, yet
often overlooked, aspect of the current regulatory discussion,�
said Gary Katz, ISE�s President and Chief Executive Officer. �We
believe that all trading venues that execute orders from public
customers should be subject to consistent oversight and high
standards for setting and enforcing trading rules in the
marketplaces they operate. At the same time, there needs to be a
rationalization in the oversight of self-regulatory organizations
(SROs) that oversee trading venues in order to encourage
competitiveness and to bring more products into a transparent
market environment that is overseen by a proactive, risk-based
regulatory framework.�
ISE proposes a new regulatory structure that reallocates
responsibilities by function among three aspects of financial
regulation: (i) financial systemic risk (covering financial and
capital matters involving commercial and investment banks, futures
commission merchants, investment companies and hedge funds); (ii)
disclosure (overseeing disclosure/risk analysis for investors and
encompassing corporate issuers, investment companies and
product-specific risk); and (iii) financial industry operations
(covering the operation of financial markets, trading platforms and
financial service providers, including but not limited to the
services traditionally provided by broker-dealers, investment
advisors, hedge funds and futures commission merchants). ISE�s
specific recommendations focus on developing a risk-based framework
for regulating financial industry operations that addresses the
regulatory gaps and inconsistencies that exist today under the
bifurcated regulatory structure in the U.S. financial markets.
ISE�s proposal is available online at:
www.ise.com/regulatoryreform.
About ISE
The International Securities Exchange (ISE) operates the world�s
largest equity options exchange and offers options trading on over
2,000 underlying equity, ETF, index, and FX products. As the first
all-electronic options exchange in the U.S., ISE transformed the
options industry by creating efficient markets through innovative
market structure and technology. Regulated by the Securities and
Exchange Commission (SEC) and a member-owner of The Options
Clearing Corporation (OCC), ISE provides investors with a
transparent marketplace for price and liquidity discovery on
centrally cleared options products. ISE continues to expand its
marketplace through the ongoing development of enhanced trading
functionality, new products, and market data services. As a
complement to its options business, ISE has expanded its reach into
multiple asset classes through strategic investments in financial
marketplaces that foster technology innovation and market
efficiency. Through its two minority investments, ISE participates
in the securities lending and equities markets.
ISE is a wholly owned subsidiary of Eurex, a leading global
derivatives exchange. Eurex itself is jointly owned by Deutsche
B�rse AG (Ticker: DB1) and SIX Swiss Exchange AG. Together, Eurex
and ISE are the global market leader in individual equity and
equity index derivatives. For more information, visit
www.ise.com.
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