At an event last night entitled, "New World Order: Deciphering the Future of High Frequency Trading" and sponsored by Aite Group, a panel discussion brought together four prominent market center heads to share their views on the new market realities they are facing.

Sang Lee, managing partner at Aite Group, was on hand to moderate the panel which included Jeromee Johnson, vice president of market development at BATS Exchange; William O'Brien, chief executive officer at Direct Edge; Brian Hyndman, senior vice president of Nasdaq Transaction Services at Nasdaq; and Joe Mecane, executive vice president and chief administrative officer for U.S. Markets at NYSE Euronext.

Regulation and potential regulatory changes were a focal point of the panel discussion. O'Brien emphasized the risk of the "politicization of market structure" and said that during the financial crisis at the end of last year that "the U.S. stock market was a model for the world " it was open and there was transparency."

The regulatory changes the panel was referring to were mainly around flash orders, dark pools, short selling, sponsored access and even the potential for regulation around high frequency trading. Hyndman cautioned that while some regulatory changes might be well intended in theory they may not always end up to be in practice and there could be unintended consequences to any changes.

When asked about the potential of a merger between the SEC and the CFTC, Mecane cautioned that any attempt to combine the two regulatory bodies should be done "in a careful, measured way," considering the market differences.

He advised more of a "harmonization" between the two regulatory bodies should be looked at. O'Brien agreed, "It's not about consolidation it's about harmonization." He pointed out that the laws are very different for each regulatory body and that they are only doing what congress has relegated them to do.

Johnson added that a merger is not as easy as it seems as there are many differences between the asset classes and it would be important to look at the complexity before making any changes.

As for flash orders and controversy, the panel seemed to agree that it erupted thanks to a perfect storm of events happening at the same time. O'Brien pointed to a combination of several factors such as increased investor skepticism, the slow pace of broader financial reform, the increasing competition among markets that came together to create the flurry of news and then questions.

Hyndman acknowledged that he was not against continuing to allow flash orders but said that in general, "it goes in the face of transparency."

But O'Brien, whose Direct Edge platform continues to operate its Enhanced Liquidity Provider (ELP) program, which offers similar flash order functionality, said that the program was developed in response to market structure changes and evolution. "It brings together exchange and non-exchange trading," said O'Brien, noting that this was an important bridge for trading.

Mecane added that he thinks the SEC should refocus on the way market structure is developing overall and that flash orders were a relatively small debate that grew into something much larger.

Johnson concluded simply "market structure has to evolve."