STA has a rich history, made possible by the quality of its members and the skills of its leadership. Each year, a Chairman and Board of Governors dedicate valuable personal time that enable STA to grow and assist in the continual transformation of the U.S. markets, the best in the world. The revolving leadership has provided a blend of leaders who make their mark and provide energy to elevate the role that STA plays in the securities industry. We are grateful for all leaders, past and present, national and local, that without whose contributions STA would not exist today.
No history of STA could be written without mention of the character of our members. STA members represent the best of patriotic, caring and generous professionals. Each of STA’s affiliates actively support charities in their local communities via financial contributions and volunteer efforts.
Security Traders Association (STA) was formed at a pivotal time in the nation’s economic history, as the Roosevelt Administration’s New Deal promised to move the United States from the grips of the Great Depression to prosperity.
The Securities Act had become law and the Securities and Exchange Commission was formed to regulate the issuance and sale of corporate securities to investors and bolster public confidence in the stock market.
STA (formerly NSTA) was born in the Windy City of Chicago, when the Chicago Bond Traders Club invited security traders across the Midwest to join them at their annual outing on August 21, 1934. View the NSTA Minutes of August 21, 1934 >
Three years later, traders from across the nation flocked to Los Angeles for the annual convention where a new, more detailed STA constitution was drafted and approved. Back then, STA worked closely with the young SEC on a variety of issues, which included deliveries of stock in a woman’s name, among many others.
The post-World War II “Own Your Share of American Business” campaign by the New York Stock Exchange opened up Wall Street to hundreds of thousands of small investors, but also to a variety of securities schemes. The SEC responded with increased oversight of the industry, and STA responded by helping regulators formulate laws to insure investor protection in the new environment.
By the 1960s, issues such as the separation of broker and dealer functions, SEC supervision of the over-the-counter (OTC) market and the extension of government controls over margin requirements were in the spotlight. Back office problems resulted in shorter hours. STA helped members stay informed on the issues and get involved in the debates that would determine their resolution. STA also helped develop STAQ (Security Traders Automated Quotation System), a forerunner of NASDAQ, which updated information on 1,500 of the more active OTC stocks throughout the trading day at hourly intervals.
With the advent of NASDAQ and the growing complexity of the market, and increased investor access continuing into the 1970s, it became clear that the all-volunteer STA needed to adapt to changing times. In 1973, Morton Weiss, a New York securities trader who had long been involved in STA activities, became the organization’s first full-time president. The move proved to be an insightful one, as STA was an integral part of the congressional debate on the Securities Acts Amendments of 1975.
It was during this time that STA made its move to increase membership, which grew to more than 7,500 members with 37 affiliate organizations. With the establishment of affiliates in Canada, STA had become a North America organization.
The STA Foundation was created and funded. The STA Foundation, which serves as the educational arm of STA, has been active ever since in the support of a variety of education and career development.
STA initiated a Washington DC government relations strategy to compliment its grassroots base. This was accomplished through efforts to seek relief from SEC transaction fees that STA collected at the rate of five-times the required amount. STA was a lead proponent of legislation to provide “fairness” on these fees. In 1999, Leopold Korins became STA President and carried this effort to a successful conclusion with the signing, by President George W. Bush, of the Investor and Capital Markets Fee Relief Act that provided a dynamic formula that has lead to fees today of approximately half of what they were at the onset. This was an important period for STA in that it led a fight and won, gaining recognition and respect on the Hill.
9/11/2001 to Present
The history of STA would not be complete without a mention of September 11, 2001.
It was during this period that the most significant market structure change began to take shape. NASDAQ collusion charges, in part, resulted in the imposition of manning limit order obligations. Soon thereafter, decimal trading was mandated.
This change clearly marked a historic point for the market making community, as the implications were far reaching and economically devastating. The imposition of these critical rule changes, along with technical innovation, caused many significant market making firms to sell, and ultimately either vanish or substantially cut staffing.
In 2003, Regulation NMS, the SEC’s effort to “modernize” the national market system, became the discussion point with the trade-through rule being the centerpiece for debate.
Importantly, STA produced its first whitepaper, “Fulfilling the Promise of the National Market System.” This was a groundbreaking effort by STA. Demonstrating great teamwork and capitalizing on the tremendous resources of our members, STA created a document that was a “signature” piece. It was hailed as an important contribution of thought on a most difficult rule filing. Capitol Hill and the Commission were quick to congratulate STA for sharing its views. In fact, though the rule came out differently, STA’s position was absolutely correct based upon the recommendation of a “phased approach.”
In the past 10 years, STA has evolved into an organization of a full mix (buy-side and sell-side) of individual members. The organization has matured in ways unthinkable in the past. The Committees of STA are functioning at high levels producing output that STA shares in Washington DC via Comment Letters. STA is recognized in DC as an organization representing professionals whose interests are aligned with investors. This recognition is borne out by our having been invited to testify before the SEC, the House Financial Services Committee, as well as the Senate Banking Committee. This is a direct result of years of effort by many STA leaders who have been committed to the betterment of the organization and our markets.
In the past five years, STA has seen business and educational content, across the country, increase dramatically at all functions of STA and its affiliates.