SEC Vote on Plan to Scrap Trade-Through Ban Set for Next Week

A full repeal of the so-called trade-through rule is included in a forthcoming proposal from the Securities and Exchange Commission, a top agency official said.

“It’s genuinely on the table,” SEC Trading and Markets Division Director Jamie Selway said Thursday in response to an audience question about whether the agency might totally scrap the 20-year-old measure. Selway spoke at the Piper Sandler Global Exchange & Fintech Conference in New York.

The rule prohibits exchanges, alternative trading systems and wholesalers like Citadel Securities or Virtu Financial Inc. from executing trades that ignore or “trade through” the national best bid or offer, which has helped ensure individual investors receive fair treatment.

SEC Chairman Paul Atkins has opposed the rule since his time as an SEC commissioner when the measure was finalized in 2005, fearing unintended consequences on the long-term growth of financial markets. Objections to the rule have included fragmentation of trading, increased costs of transactions, the impact on speed of execution and taking away the ability of investors to choose their preferred exchange.


In his comment, Selway noted Atkins’ prior remarks on the subject, and said “if you follow his perspectives, you have a pretty good indicator of our direction of travel.” The SEC didn’t have an immediate comment.

The SEC has scheduled a commission vote on the proposal for June 11. The White House’s Office of Management and Budget concluded its review of the rule on Wednesday, according to a post on the OMB website.

https://uk.finance.yahoo.com/news/sec-vote-plan-scrap-trade-150243157.html