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Time for a public hearing about the stock market?

It's time for a public hearing about what's going on with our stock market.

I've said Michael Lewis' claim that the stock market is "rigged" is a gross exaggeration, but we can thank him for one thing: the megaphone he has with "60 Minutes" has helped revive a sleepy debate on what is right—and wrong—with our market structure.

And now, it is time to strike while the iron is hot: It's time for the U.S. Securities and Exchange Commission to convene a series of public hearings on the stock market.

Read MoreMichael Lewis, 'Flash Boys,' and '60 Minutes'

Bring in exchange heads, asset managers, regulatory experts, academics.

Let's examine all the new market data that the SEC has been generating recently about trading volumes, and about high frequency traders.

Let's get some consensus of what has gone right, and what has gone wrong.

Most importantly of all: Let's open up Reg NMS, the rule that came into effect in 2007 and helped "cement" much of the current market structure.

Adam Jeffery | CNBC

This is the rule that required traders honor the best price. This is the rule that established the routing requirements between all the exchanges. This is the rule that allowed stock exchanges to pay rebates to customers. This is the rule that created new exchanges (BATS, Direct Edge). This is the rule that spurred development of dark pools and was responsible for "speeding up" the markets.

This is the rule that is at the core of our current market structure.

Why reopen all this nerdy stuff about the markets? Because the real risk is not high frequency traders: the real risk is the structural integrity of the market.

Read MoreMichael Lewis' 'Flash Boys' and high-speed trading

I think it is time, and the SEC thinks so too, apparently. When I spoke to SEC Commissioner Dan Gallagher a few weeks ago, he said the SEC would conduct a "holistic" review of the markets this year.

That's a great idea, but let's start it off with public hearings. From there, the SEC can move to a report that will make concrete suggestions on what should and should not be done to improve the markets.

Also, how about the SEC getting a little bolder by setting a goal: it should aim to have a report out by year-end. No endless debate. No endless commentary periods. And no shelving the recommendations.

Read MoreNew York to probe high-frequency trading

The SEC had little comment in reaction to the Michael Lewis interview, releasing only this statement: "The staff, at Chair [Mary Jo] White's direction, is conducting a comprehensive data-driven analysis of a range of market structure issues, including high frequency trading practices and their impact on the fairness, efficiency and integrity of our markets."

That is a sign that they have already begun a review. Good. Let's accelerate the process.

What are the right questions to ask? I have been writing about this stuff for years. I have a laundry list of things I would like to see changed or at least carefully examined, much of which has nothing to do with high frequency trading, but rather addresses the rather creaky market structure we have:

1) Do we need 50 different places to trade? Can we encourage the spirit of competition but still have fewer trading venues, which would help reduce complexity and the possibility of technological failure?

2) Should there be a level playing field between dark pools and exchanges? Should dark pools have the same requirements as exchanges? Exchanges are heavily regulated, dark pools are not. Right now, dark pools don't have to file any rules on the services they might want to offer; exchanges do. If exchanges are the preferred forum for price discovery, should dark pools be required to provide price improvement in order to execute a trade?

3) Why do exchanges need to pay traders rebates to come to their exchanges, and why should select market makers pay retail shops like TD Ameritrade, Schwab, and Scottrade for their order flow? Does it create perverse incentives that are not in the best interests of the public?

Read MoreMichael Lewis targets high frequency trading

4) Why can't we move forward on some clear standard for ensuring the soundness of trading technology? Reg SCI, which would set clearer standards for exchanges to follow regarding information security and redundancy, has been sitting on a shelf for nearly a year. This would go a long way toward reducing technological risk and the kind of disasters that caused the Knight Trading debacle.

5) What can we do to get those who represent the retail buyside (mutual funds, for example) to hold their brokers to the highest possible level of order execution?

6) Should the industry charge message traffic fees? Should traders who put in huge amounts of orders to buy and sell stocks that are never executed be subject to some sort of fee so that those who use the system the most help pay for it? Would that address legitimate concerns that some may be trying to abuse the system?

7) How can we get companies and market information providers to be sensitive about when they release information, and to make sure it is released to everyone at once? Companies should be cognizant that we trade in a microsecond world, and to be careful when they release information. Companies releasing earnings reports right at 4 p.m. ET, for example, should consider a decent interval so that trading from the close does not "bleed" over into trading on the earnings release.

Read MoreSEC official: What's hurting the 'little guy'

8) How can we make sure that the SEC has adequate tools to investigate cases of abusive or manipulative behavior? I am concerned that there may be SOME high frequency traders that engage in abusive or manipulative behavior, and the SEC needs better tools to detect possible abuse.

The SEC recently unveiled a new system, dubbed MIDAS, designed partly to look for manipulative behavior.

The SEC has put out bids for a deeper and more sophisticated tool, called the Consolidated Audit Trail, that would record every quote, every trade, every customer and would give the regulators a much clearer understanding of what is going on.

That will not come before 2015 at the earliest, but it will be a welcome development. Maybe we could speed that process up a bit?

Finally, how about the SEC getting a little bolder and more pro-active.

The SEC is charged with making sure the markets are not rigged.

Now you have a guy who says, "The markets are rigged!"

How about the chairwoman of the SEC issues a one page statement that says:

"Investors of America, the stock market is not rigged. It is safe to invest, even as we will try to protect you against abusive and manipulative elements. Our stock market system is not perfect, but it's better than it used to be. And we promise we will keep trying to make it better, and if we did something in the past that is not working, we will get rid of it.

Sincerely,
Mary Jo White
SEC Chairwoman"

I know. I've been doing this too long, and I'm starting to get crazy. But one can dream, right?

I'll be talking to Michael Lewis and the man he believes can change the system, as well as to William O'Brien, president of BATS and Direct Edge, on CNBC's "Power Lunch" at 1 p.m. Eastern Time Tuesday.

By CNBC's Bob Pisani

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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