Updated
Updated · Bloomberg · Jun 11
SEC Proposes Scrapping 2005 Equities Trade-Through Rule
Updated
Updated · Bloomberg · Jun 11

SEC Proposes Scrapping 2005 Equities Trade-Through Rule

3 articles · Updated · Bloomberg · Jun 11

Summary

  • The SEC moved to eliminate the equities trade-through rule, a core market-structure safeguard that bars venues from executing orders at prices worse than the national best bid or offer.
  • The proposal targets a rule in force since 2005 that applies to exchanges, alternative trading systems and wholesalers including Citadel Securities and Virtu Financial.
  • By removing that requirement, the agency would unwind a protection designed to help ensure individual investors receive the best available displayed price on stock trades.

Insights

If the SEC scraps its 'best price' rule, are small investors about to get a raw deal?
Will eliminating a single trading rule fix market fragmentation or just unleash a new set of problems?