Virtu Financial, Inc. Class A

Thank you for joining the Virtue Financial 2022 third quarter results. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question and answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly. And now I will turn the call over to Andrew Smith.

thank you rika and good morning everyone thank you for joining us our third quarter results were released this morning and are available on our website on this morning's call we have mr douglas siku our chief executive officer mr joseph meluso our co-president and co-chief operating officer mr sean galvin our chief financial officer and miss cindy lee our deputy chief financial officer we will begin with prepared remarks and take your questions first a few reminders today's call may include forward-looking statements which represents virtues and uncertainties, which may be outside the company's control. Please note that our actual results and financial conditions may differ materially from what is indicated in these forward-looking statements. It is important to note that any forward-looking statements made on this call are based on information presently available to the company, and we do not undertake to update or revise any forward-looking statements as new information becomes available. We refer you to disclosures in our press release and encourage you to review the description of risk factors contained in our annual report, Form 10-K, and other public filings. measures should be considered as supplemental to and not as superior to financial measures as reported in accordance with GAAP. We direct listeners to consult the investor relations portion of our website where you'll find additional supplemental information referred to on this call as well as reconciliation of non-GAAP measures to the equivalent GAAP term in the earnings material with an explanation of why we deem this information to be meaningful as well as how management uses these measures. And with that, I'd like to turn the call over to Doug.

Thank you, Andrew, and good morning, everyone. This morning we reported our third quarter results. For the quarter ended September 30th, we generated 61 cents of adjusted EPS and $5.2 million per day of adjusted net trading income, bringing our year-to-date results to $2.61 per share and an average adjusted net trading income of $6.3 million per day. Our business performed well. opportunity benchmarks. Our results enable us to consistently return capital to our shareholders through our ongoing share repurchases. As of today, we've repurchased a total of 31.1 million shares or over 870 million dollars in aggregate and at current levels, we will continue to be aggressive approach to everything means we're already finding ways to deploy what we are learning in U.S. equity options to opportunities and options abroad and in other asset classes. Speaking of scale, as we grow in options, For now, being competitive in options requires significant investment in technology and people to ensure that we have adequate capacity to meet our goals. We continue to make methodical progress in expanding our symbol universe and increasing our interactions with order flow from options routers. Our growth in options year-to-date is especially impressive given the market-wide options volume is relatively flat for the same period. Our growth initiative expanded to opportunity that we can address in Bitcoin, Ethereum, and other top cryptocurrencies across various forms, including SPOT, as well as ETFs and futures. EDX Markets, our venture with Citadel, Fidelity, Schwab, Sequoia, and Paradigm to develop a crypto ecosystem to serve the interests of global investors is proceeding nicely. Our global ETF block initiative also continues to contribute to our results. universe in conjunction with key investments we're making to become a dealer in the market for corporate bonds. Before I turn it over to the financial review, I'd like to speak about market structure, what's currently being considered by the SEC, and a reference to provide facts and data to the public discourse. We believe a positive element of the advocacy work we're conducting is creating a broader understanding of the extraordinary value that the current There are a number of points worth highlighting about the market structure. First, I want to be very clear that while there are still no official proposals from the SEC, it would likely be years before certain ideas are proposed, adopted, become rules, and then are finally made effective. Virgil remains publicly supportive of several of the ideas discussed by Chair Gensler in his June 8th speech. Specifically, we agree that exchanges should be able to display narrower quotes, specifically half-penny quotes for tick-constrained symbols, Odd-like quotes should be included in the SIP, and Disclosures and Retail Execution Quality Reports, Rule 605, should be modernized as we requested in our official petition for rulemaking, which we submitted over a year ago. That said, historically, FEC rules proposals with the potential for substantial market impact have followed a deliberate multi-year process of concept release, roundtables, and other forms of industry engagement designed to solicit broad, and substantive feedback on a particular marketplace theme. These processes help ensure that any final proposals ultimately borne out of the exercise are responsive to actual marketplace challenges and enjoy broad and diverse support across a range of market participants. Effective and efficient rulemaking is a methodical process. Doing it right takes time and benefits from the experience and requirements for rulemaking. Unfortunately, as was recently reported by the SEC's own Inspector General, the current chair and his political appointees tend to preference speed over accuracy, and as the SEC's Inspector General stated, lack the resources to keep up with their self-appointed agenda, potentially at the risk of adherence to the agency's own prophecies and ultimately the rule of law. The SEC's unchecked speed and lack of resources is especially worrisome to a broad range of market participants and investors, including hundreds of our clients, given that the SEC has assigned itself an ambitious agenda with numerous interrelated market structure reforms that, if enacted, could significantly and permanently alter our efficient, accessible, and resilient financial market. Despite the industry's general agreement around where the SEC should focus its efforts, the Chair's repeated misstatement of facts regarding retail order routing practices and payment order flow provides little comfort that the staff are empowered to actually listen to industry feedback or are incorporating readily available data into the decision-making processes, but are instead engaged in, as a prominent buy-side commentator noted this week, in regulation by hypothesis. We support Schwab's comments in its recent white paper that the U.S. equity markets are, quote, the deepest, most liquid, and most efficient in the world, which allows investors to enjoy narrow spreads, low transaction costs, and fast execution speeds, close quote. We also echo Schwab's concern that the SEC's, quote, calls for reform are obscuring the benefits of the current ecosystem to retail investors long-standing goal of enhancing and protecting the retail investor experience. We will remain earnest in our endeavors to engage the SEC in hopes they embrace the constructive engagement that the industry continues to offer to advance policies that enhance transparency, competition, and that promote investor choice and superior execution quality, rather than the current SEC's obviously politically motivated agenda. I will now turn the call over to Jeff.