ETF Movers & Shakers: Reggie Browne

Meet the liquidity provider working behind the scenes to keep the ETF industry—and your trades—moving smoothly.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

[This is part of an 11-part series we will be publishing each weekday until it is complete. The ETF Movers & Shakers feature appears in the March edition of ETF Report. Previously published: Nadig & Balchunas]

The "Godfather of ETFs"—that's what Forbes magazine called Reggie Browne back in 2012 when he headed the giant ETF market-making desk for Knight Capital Group.

Though he's since moved his business to Cantor Fitzgerald, he remains as influential as ever in the ETF industry.

Movers and Shakers

Reggie Browne

At the heart of Browne's business—which has been hosted under three different corporate umbrellas since it began—is his market-making operations, which provide crucial liquidity for ETFs.

At one point when they were under the Knight Capital umbrella, Browne's team was the lead market maker for 600 exchange-traded funds, or a whopping 40% of the funds listed on the New York Stock Exchange at the time.

Cantor is now lead market maker for about 150 ETFs, as Browne re-establishes the business under the Cantor brand. But just as he was when working for Knight, Browne remains instrumental in providing liquidity for new funds of all kinds.

"We've helped new ETF fund families like IndexIQ and PowerShares come to the marketplace," said Browne. "We brought the first active bond ETF, the PIMCO Total Return Active ETF (BOND), to market, and we've brought all the bank loan ETFs to the marketplace," he said.

And Browne's influence has not been limited to just the U.S. It extends internationally to areas other liquidity providers have shunned.

"Given regulations around some banking nuances, investment banks walked out of certain countries, and clients there were left without a mechanism to transact business," explained Browne. "So I went in and provided liquidity. At one point, I was by myself in Mexico and parts of South America."

As an ambassador for ETFs, Browne has been a key player in educating and bringing new institutions into the marketplace. Not only that, he's been at the forefront of solving some of the tricky regulatory issues surrounding ETFs through his role as a member of the Securities and Exchange Commission's Equity Market Structure Advisory Committee.

As he says, Browne is essentially the ETF voice on the committee: "I advocate for a market structure that's beneficial to ETFs, and try to bring ETF concerns into the light."

Those concerns include the events surrounding the "mini flash crash" on Aug. 24 of last year, when many ETFs briefly plunged well below their net asset values, sparking fears that the funds were exacerbating market volatility.

In response, Browne wrote a detailed letter on the matter to the SEC, explaining that "a review of market structure around ETF trading is certainly worthwhile ... " but that it must be "driven by the careful analysis of empirical data.

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.