professor batallio, let's talk about the nonmarketable orders. these are the ones that don't have an immediate match in the add or make lek wid iquidity. under the make or taker pricing, most exchanges are willing to pay brokers for sending them nonmarketable orders. so far -- >> yes, sir, very good. >> some retail brokers send virtually all nonmarketable orders to exchanges that pay a rebate is that correct. >> that also appears to be true. >> see if question get in a -- >> now, your paper -- your paper looked at where retail brokers routed nonmarketable customer orders and stated that ameritrade, fidelity, scott trade, era trade routes orders a way that they may focused on liquidity rebates h. >> well, three of the four brokers either route things called -- the sec reports are not good enough to distinguish between marketable and nonmarketable limit orders. based on an assumption that is pretty solid three out of the four market pay who flow for flow or to the high fee venue. no where else. the venue is the exchanges. >> it's one venue offering

quirk, i think you were critical of the batallio testimony. i wonder if you'd be able to provide him with data to analyze? >> yes, we were actually asked by professor batallio after his paper was publish. i think we would be willing to share data, of course, you know, we'd have to ensure that that wasn't going anywhere. when you were asked, what was your answer? >> to be honest with you? i'm not entirely sure. i believe that he was told that it was being considered, but i'm not certain. >> let me conclude with saying the following. number one, we had a very good hearing, a very constructive hearing. we've heard a consistent message. and that is that there's a lack of confidence in the markts. the conflicts of interest contribute to that lack of confidence, they may lead to investors being worse off, that's what his study shows. all of these problems should be and can be addressed. one of the ways we've got to do it is to remove the conflicts of interest. some have been very dramatic. age so, hopefully, the regulatory agencies are going to take

that's what professor batallio told us today what his study shows. both of these problems, all of these problems should be and can be addressed. one of the ways we have got to do it is remove the conflicts of interest. the subcommittee has looked at other conflicts, some of which have been very dramatic in earlier hearings, and we've had to rid or market of the conflict of interest to the extent it's humanly possible, if we're going to restore conflicts in our markets, and it's very important that we do have confidence in our markets. so hopefully the regulatory agencies that are going to take action, as several mentioned, they're going to look at structural issues, and hopefully they won't take as long as they tail on a lot of other things that just fester at the regulatory agencies for years. these things sometimes happen, hopefully more often than not through the operations of the free market, but some of them just don't happen without government saying you've got to change your ways, folks, and you've got to take steps a and b if you're going to

professor batallio, let's talk about the nonmarketable orders. these are the ones that don't have an immediate match in the add or make liquidity. under the maker taker pricing, most exchanges are willing to pay brokers for sending them nonmarketable orders. so far -- >> yes, sir, very good. >> some retail brokers send virtually all nonmarketable orders to exchanges that pay a rebate is that correct. >> that also appears to be true. >> see if we can get that -- >> now, your paper -- your paper looked at where retail brokers routed nonmarketable customer orders and stated that ameritrade, e-trade, fidelity and scottrade route orders in a way that suggest that may be focused on liquidity rebates. how often did those retail brokers route nonmarketable orders to the exchange offering the highest rebate? >> those four brokers -- well, three of the four brokers either route things called -- so the s.e.c. reports are not good enough to distinguish between marketable and nonmarketable limit orders. okay. but based on an assumption that's pretty solid, th

in addition to professor batallio, today's first panel will include brandly katsuyama, the president and ceo of iex and prominent wall street advocate for market reform. the second panel will include four witnesses. they are thomas farley of the whose corporate owners have described conflicts as having a, quote, corrosive impact, a corrosive impact, close quote, on stock markets. the next person on the second panel is joseph raderman of bats global markets, which operates exchanges that compete with the new york stock exchange and has a different view. the third witness on the second panel is joseph brennan, of vanguard group. a major mutual fund company that has expressed concerns about these conflicts. the fourth witness in the second panel is steven quirk of td ameritrade. a retail broker that derives significant revenue from payment for order flow, from wholesale brokers, and from rebates that they receive from exchanges. the duty of lawmakers and financial regulators is to look out for the interests of investors and the wider public. there is significant evident that these confl

in addition to professor b batallio this panel will include bratly caugh bradley katsuyama.he second panel will include four witnesses, thomas farly whose corporate owners have described them as having a corrosive impact on stock markets. joseph radermin of bats global markets which operates exchanges that compete with the new york stork ex-change and has a different way. the third witness on the second panel is joseph brenin of vanguard group. a major mutual fund company that has expressed concerns about these conflicts. the fourth witness in the second panel is steve quark of t.d.ameritrade. a retail broker that derives significant revenue from payment overflow and from rebates they receive from exchanges. the duty of lawmakers and financial regulators is to look out for the interests of investors and the wider public. there is significant evident that these conflicts can damage repyrement savings, pension holdings and other investments under which americans rely. even americans without a single share of stock or mutual fund account have something at stake because stock ma