Market Efficiency. Markets should be designed to maximize efficiency for all investors. Improved market efficiency leads to a better understanding of market prices, lower trading costs, greater liquidity and better long-term returns for investors. Companies participating in efficient capital markets are better positioned to grow and create jobs in today’s economy.
Fair and Equal Access. Markets should promote fair and equal access for all market participants. A level playing field, without unnecessary barriers to entry for investors, allows them to compete effectively. When HFT tools are available to all, market quality improves.
Transparency. Transparency delivers the investor a more efficient market by providing the best price through healthy competition. Transparent markets give investors greater confidence by providing them with the best information about market prices, how their orders are being handled and how markets are operating.
Competition. Competition among market participants–big or small, buying or selling—is a key ingredient to a well-functioning, vibrant marketplace. Competition drives better prices and encourages more participation in the marketplace, which helps the investor. Whether investors are pursuing the most innovative technology, the most up-to-date information or the best price, competition in our marketplace has been crucial to guiding investors through both good and bad market environments.
Market Stability. Because our capital markets are designed to serve the needs of both investors and listed companies, the stability of exchanges and market institutions is critical. Market instability jeopardizes the ability to meet the needs of investors and businesses.Appropriate risk controls are critical to responsible market participation and the promotion of market stability.
Simplicity. Simpler markets with clear rules are easier for investors to understand. Taking steps to simplify today’s markets for the investor improves our ability to enforce the rules and ultimately builds trust in our markets and makes them easier to compete in.
Sound Regulation. Regulations advance the investor’s interests when they are clear, fair, data-driven and enforced. Sound modern regulation minimizes inequities in the marketplace, making them better for all market participants. We support regulatory improvements informed by data that seek to improve the investor experience while also supporting vigilant oversight of the marketplace.Effective regulation is also achieved by avoiding overly broad and reactionary regulation that imposes additional costs on investors while removing benefits.
JACK BOGLE, founder Vanguard Group
Moneywatch, April 3, 2014