Depends on the jurisdiction and sentencing guidelines, but my layman’s understanding is so that both parties have time to construct and file arguments over the severity of the sentence.
333 karma · joined April 9, 2015
Turns out in the two decades I’ve been in my industry everyone else has gone to ‘the cloud’, and the tooling has gone with it. Every product or project I looked at was skewed entirely toward physical host agnostic and/or single service reliability agnostic management.
So not only is in an issue with going back on prem, there’s entirely unserviced customers that cannot adopt the tooling given the direction it’s been developed.
It isn’t, precisely for this reason. The US Equity and Equity Derivative markets have tried a few times to get approval for initiatives using their already existing BDs (to facilitate inter-market order routing), and in every case it’s been blocked by the regulators as too risky to the underlying business.
The issue here has more to do with the lack of a centralized C&S clearing house in crypto, and is one of the reasons counterparty risk remains such a massive issue there. Having to maintain an account at each exchange, much like you would a BD, and praying things don’t suddenly go pear shaped, strikes me as insane (and is one of the primary reasons I’ve avoided getting involved in the crypto space)
Excluding some of the technical details, specifically related to US Equities, which are a bit outdated, it is hands down the best book on the subject of market participants and their interactions.
Books like Reminiscences of a Stock Operator are great as well because they provide a little historical context to market regulation and improvements to market structure.
If someone were particularly interested in clearing and settlement there is also After the Trade is Made
Exactly, and when you have an unorderly market, price discovery becomes problematic.
It’s the same reason the single stock LULD bands exist (which put the brakes on both rapid downward and rapid upward movement). Stopping for 15 minutes (or 5 in the case of a LULD pause) is not detrimental to the process of establishing orderly price discovery.
In the event a stock is going to keep rising or falling due to legitimate changes in valuation it will continue to do so (look at NASDAQ’s halts page today to see stocks that have hit their bands multiple times).
The concept was introduced in US equities after the ‘87 crash, but was only consistently implemented for NYSE-listed stocks. In ‘13 these were made consistent and market wide (thus MWCB), set against a widely published value of the S&P (so that the control was predictable; thus how it executed today).
FYI, there are also bidirectional halts that exist intraday (Limit-Up/Limit-Down) that serve a similar purpose and control rapid, uncontrolled movements in individual stocks. These are also defined in exchange regulation and are well defined so that they are predictable.
Market fragmentation aside, adding more price levels to set orders to disaggregates liquidity in the book, usually resulting in lower execution quantity (which increases your overall transaction costs if you’re trying to space trades out).
The DTC is part of the subsidiary family of the DTCC, which also operates the NSCC. The NSCC handles security clearing for almost all equities trading in the US (all transaction systems basically report here at the end of their reporting chain).
This basically allows the NSCC to simply update the ownership accounting of a number of shares, as opposed to hunting down the physical stock certificates, validating their authenticity, and then handling the transfer.
This has ultimately greatly reduced the settlement window (from Trade date + however long it takes to find the certificates, to, as of a month or two ago T + 2 days), which allows firms to free up capital (the cash doesn't exist until the trade settles) to commit to other endeavors.
A shorter settlement window (and the consolidation down to a single system), also reduce overall counterparty risk, as once the trade is settled you don't necessarily have to be concerned with the financial well being of the firm you did the trade with.
In the hypothetical "one quote a day" market, the quotes will be insanely wide to account for the risk that the natural price of product moves through the quote (with no way to provide pricing/quoting updates).
That said, I like the idea of a slower market, but, much like the debate over Maker/Taker, it will take an entire industry shift and can't be done on a single venue.
It also takes time to coordinate investigating multiple different asset class transactions, in the event, say, equity derivatives are used.
And no, we don’t have info on what happened and what was taken, and certainly nothing about any regulatory investigations.
Frankfurt may be a better option solely on the basis that it is more "environmentally" stable (in terms of events that may disrupt the operation of the facility).
The SEC order there is an interesting read for anyone involved in large scale transactional systems: https://www.sec.gov/litigation/admin/2013/34-70694.pdf
- The Good Spy - Kai Bird (Robert Ames bio)
- Becoming Steve Jobs - Brent Schlender (after reading Isaacson's Jobs' bio I figured another perspective wouldn't be horrible)
- Countdown to Zero Day - Kim Zetter (RE: Stuxnet and cyber-espionage)
And finally, I'm re-reading The Accidental Guerrilla by David Kilcullen (something of a social science approach to "Why do rebels/guerrillas/terrorists exist?")