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equiy Market Structure: Simplifying the Complex Guest speakers in this panel included Anthony Barchetto (EVP, Head of Corporate Development, BATS Global Markets, Inc.), Jamil Nazarali (Head of Execution Services, Citadel Securities Inc.), Eric Stockland (Chief Strategy Officer, IEX Corp.) and Pankil Patel (Managing Director, Electronic Sales, BofA Merrill Lynch). ¢ Panel members had a spirited debate regarding the current market structure pros and cons, rebates, off-exchange trading, latency, market maker obligations, and the future of regulation post the election. e We asked investors what they thought of the current state of the equity market structure, and 74% thought that the market needs revamping. 32% believe that there was a problem with the depth of liquidity and 23% thought there were misaligned incentives. Chart 72: What is your view of the current state of the equity market structure? 35% 32% 30% 25% 20% 15% 10% 5% 0% The market The market The market The market The market structure is overall structure needs —structureneeds structure needs structure needs a adequate improvement- improvement- — improvement — full revamp notably in notably in liquidity notably in transparency of size misaligned incentives Source: BofA Merrill Lynch Global Research ¢ — Given the announcement that SEC Chairwoman White will leave at the end of President Obama’s term, this will likely lead to some regulatory uncertainty and lack of activity given not enough commissioners to make forward progress. In addition, the new Chair will likely be focused on less regulation and one panel member thought Reg NMS could come under review. Lite after DOL: Evolving Beyond the Fiduciary Rule We hosted industry experts for a panel on the Department of Labor’s (DOL) fiduciary rule, which is set to go into effect in April 2017. Panel participants included Michael Hadley (Partner at Davis & Harman LLP), Lisa Bleier (Associate General Counsel at SIFMA), and Kevin Crain (Head of Workplace Financial Solutions at Bank of America Merrill Lynch). « Given potential changes for the brokerage industry, we asked investors “Will the DOL’s fiduciary rule cause meaningful changes to the brokerage industry?”. Most investors believe that the rule will cause a number of significant changes to the brokerage industry (83%), including significant pressure on commission revenues, a shift to advisory and fee based accounts, and assets in motion with some to robo advisor and RIA platforms. Bankof America 2 2016 Future of Financials Conference | 17 November 2016 49 Merrill Lynch HOUSE_OVERSIGHT_014363