Episode 1: Transparency; Conflicts of Interest and Best Execution

In Episode 1, we sat down with Joe Wald, Managing Director of Clearpool Group , to discuss issues around transparency and conflicts of interest involved with order routing decisions.

Concerns about conflicts of interest come up all the time in financial markets. The worry is that investors will be harmed if those who owe investors a duty or obligation are conflicted and end up looking out for themselves instead. Given the SEC’s investor protection mandate, it should come as no surprise that a lot of regulation is aimed at conflicts. In particular, those which exist with broker dealers in their order routing decisions of customer orders, the topic of this podcast.

On June 15th, U.S. Court of Appeals for the District of Columbia Circuit thwarted an SEC proposed pilot that would study how exchanges’ pricing creates conflicts of interest for broker dealers that may harm investors. The Courts action was well covered not just because of its ruling on a controversial issue, but also for the language it used in its decision and how it may affect the SEC’s behavior going forward. We recently caught up with Joe Wald, to get his perspective on the DC Circuit decision and how it effects initiatives by the SEC, which seek to increase transparency into order routing with the goals of identifying conflicts of interest and understanding their influence. Joe, is the former chief executive and co-founder of the electronic trading software provider, Clearpool Group, and since being acquired by BMO Capital Markets in January 2020,  is currently a Managing Director, responsible for the execution of Clearpool’s vision and strategic direction.