Quarterly routing disclosure. Im going to have to go vote. I apologize ever going to have to recess for about 15 minutes. It will give you a chance to do Something Else you might need to do. We wille is . Reconvene at 1215. Thank you all. We should thank the witnesses for their patience and understanding with the senate. Let me pick up where we left off. I guess we were talking about how many trades the route to exchanges in a typical order. I think we rounded off. Queen looked at your form 606 disclosure. They direct the all marketable quarters to one venue. Is that correct . That is correct. Exchanges, they paid the highest rebate 2012. You say the orders, your policy is to rent it first and foremost on best execution. We learned best execution is a subject to judgment. Is what is the best execution for tens of millions of customer orders a year. To route all of the orders to the market to pay you the most. I find this to be a pretty dissidence. You directed all year orders because you said that offered your company the best execution. This is not show a single order in directive to the new york self change. This was worse than direct edge in getting the best execution on retail orders. No. Did Td Ameritrade fees from routing orders to venues that pay maker rebates . Do you know how much you make from just for payment from order flow . I base it on what we discussed. It would be about 8 million. Pay maker taker rebates. Did they pay fees to exchanges last year for routing orders to venues . I do not know that. That it is not close to zero. I do not know. It would not be significant. We get that answer . For virtually every trade, your customers were at or off by your routing their orders to the exchange that paid you a rebate rather than a venue that they would have had to pay a fee. Is that true . And the subsequent 24 months let me go into that. In year 606 disclosures are the First Quarter 2014, they routed all nonmarketable orders to either direct edge or lob a flow. The exchanges to have offered the highest rebate available in the market. Is that true . That would be true. Your subject will be to which market provided tens of millions of customer orders. I think the witnesses for coming. Banningfect would mannin stocktaker have on your exchanges . It would change the way in which we charge our customers to access market. On the order of two cents for. Very 100 shares traded, it will reconfigure the mechanism we have. We would simply adjust this to whatever framework the law allowed. We would have fewer order types which would reduce complexity in the market. We would likely have your venues as well. We have three separate equity trading enemies. We would not need these were we did not have maker taker and i think our competitors written reduce the number of venues. If we ban maker taker, it is possible more businesses would move away from regular exchanges. It is a trade at provision. I have a question for all of you. Perception is reality in reality is perception. I think you would agree that we would not be having this hearing if it was not for significant questions out there about the business fairly or unfairly. There is a problem out there. Would you agree with that . I you do not think there is a problem of Public Perception . Right beginning with you in going down, to believe there is a Public Perception problem . If there is, what do you think we ought to do . What measures ought to be taken . If you think there is no pr problem, just say i do not think there is a problem. What do you think we ought to do . I think it could be a lot better. Are talking about about trading differences. These are our listing businesses. They come to market to raise capital. This is built entirely on perception. We want to do what we can to improve this. Suggestions. Eral we think it would improve this because of some of the aftereffects. Reducing messaging and venues. When you bring that sort of simplicity to the market, that breathes confidence. It is more tangible. I think we would all believe transparency will culminate a lamination of that. It would also be the positive effect or no effect . Eliminating it would go in this direction. Bring you more transparency to the practice i think is a great idea to whatever extent we can. Question that these have entered into the mainstream. People wonder how it works. I think to adjust that may be a few things. Ofres probably some areas immediate transparency that can be brought into the market. I think they start to do that. Are reoperators that have all released this as an example. You are seeing a trend in the testimony. We have talked about areas from earl 606. I think this would yield a lots of insights. The mediumterm response is to let the sec to the holistic review that he has articulated to the industry. Everything on the table and something will undoubtedly change and that process. A will find ways to optimize and improve some good attributes for todays market. Even things we do not change the way mark for the regulator is. We have the data. We have concluded this is a good Market Structure. We will leave it in place. It will be here. Nothing will be let down. Thank you. As to whether there is a perception problem or not or a confidence issue, the only thing i can judge that on is our business. They have an hundred 38 billion of this command. What are you going to do on saturday night, he said im going to the poker game. Why russian mark because you know the game is cricket. It is the only game in town. I do not accept her allegation that everything is fine. If that is your view, i respect it but i do not agree with the. I would probably have a closer view. I am going to tell you and the behaviors they have exhibited. It would be consistent. We have seen trading accounts increased 31 . We have an index which we created several years though. Are they participating in the rally . Significant portion had. That being said, i agree that there is a perception problem in a segment of these clients. These terms do not mean anything to them. They are trying to make sure is that we do not speak them. We do not want them to hang a are being treated unfairly. I think the witnesses. Thank you. Mr. Brennan, earlier this year you said that some highfrequency traders played a role in getting back together a fragmented Market Structure. Other traders may be unfairly taxing the system through their behaviors. That someentioned highfrequency traders unfairly tax the system, were you talking about firms that engage in rebate arbitrage or they tried to capture ones . There are folk there. They contribute to that problem. I think the Market Structure improvede has genetically over the past 20 years. Im talking about the part that has not improved. Some highfrequency traders unfairly tax the system. You are referring to the firms that engage in rebate arbitrage. Thek you whether or not iser taker system contributing to that problem . That in combination toh data speeds contribute potential issues. Any have rebate arbitrage without rebates . No. They contribute to the problem. Yes. I think you were critical about the testimony. I am wondering whether you would be able to provide him with the order routing data so that he could analyze it . We were there at her was tore we would be willing share data. I think we would be. We would have to ensure that was not going anywhere. What was your answer . To be honest, im not entirely sure. Told it was being considered. I am not certain. Let me do my very replacing the following. We had a very good hearing, a construct to hearing. Consistent message. There is a lack of confidence in the markets. Interestict with contributes to the lack of interest, both the actual conflict as well as the appearance of conflict eerie they may lead to regular investors being worse off. Is what he told us today. That is what his studies show. Best both of these should be addressed. One of the ways we have got to do it is to remove the conflict of interest. Some of these have been very john mack taken earlier hearings. Look at this to the extent is humanly possible if we are going to restore confidence. It is very important that we do have confidence in our markets. They are going to look at structural issues. Will not take as long as they take a cold lots of ther things that fester Regulatory Agency for years. We also are on role for congress. Nottimes more often than some of these do not happen. He got to change her ways. We have to agree to what the steps are. There are steps which must be taken by regulators or by congress. These exist in the current market. We appreciate your testimony. We are sorry it was interrupted by two votes in the senate. That is the way our life works around here. I wish we could pass a law to end interactions and hearings. Thank you for all. We stand adjourned. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2014] cspan covered another hearing dealing with fraudulent weightloss and dr. Oz who defended the promotion of diet products on his show. He appeared before a subcommittee that deals with product safety. I want to follow up