Confidence, fairness and integrity are among the most important issues for stock market investors, William O’Brien, CEO of DirectEdge, told CNBC Tuesday.
DirectEdge, with two fully electronic exchange platforms, becomes the fourth largest US stock exchange Wednesday.
“Investor confidence is critically important,” said O’Brien. “It doesn’t really matter if we talk about circuit breakers or high-frequency trading. With unemployment at 12 percent, and we don’t have economic growth, investors are not going to be excited about the stock market."
The US jobless rate in June fell to 9.5 percent, from 9.7 percent in May.
“We need to get the economy moving again and to get capital formation going. And then, behind that, [we need to] work on improving the integrity of the market structure so they [investors] can have confidence that the game is fair and equitable for all,” said O'Brien.
This year, DirectEdge has handled between 10 percent and 13 percent of the monthly US stock trading volume. It averages a volume of 1.4 billion shares daily. Its dual equity trading electronic platforms are EDGX and EDGA.
Among those holding big stakes in DirectEdge are Goldman Sachs , JP Morgan Chase and the hedge-fund heavy hitter Citadel.
O’Brien said a large part of DirectEdge’s business, like that of the other exchanges, is high-frequency trading, but he added that it also handles retail brokerage, institutional and order flow. “That's one of the reasons why we have two exchanges, rather than one," he said, "so we can be more things to more people.”
As more and more trades are handled electronically, O’Brien said that the trend is headed toward fewer and fewer human traders working on the trading floor.
O’Brien said he supported new financial regulations. He added that he is “proud” that solutions were on the table in Washington for averting another market seizure, the so-called flash crash, a month after it happened.