(Finance) – The largest US stock market manager, the largest retail brokerage firm and the largest market maker have asked the Securities and Exchange Commission (SEC) of the United States of withdraw its recent proposals to revamp the way shares are traded. “We are deeply concerned that the Commission has presented at the same time multiple far-reaching proposals that would radically change the current market structure without properly assessing the cumulative impact on the market or the potential for unintended consequences“, reads a letter from NYSE Group, Charles Schwab and Citadel Securities.
The SEC in December proposed requiring that almost all orders retail of retail shares are sent to auctionsas well as a new standard for brokers to prove of get the best possible executions for their clients’ orders, along with lower access fees on trades, and more robust retail order execution information.
“While we agree that there are some regulatory improvements that should be advanced, we recommend pursuing a deliberate process focused on the identification of customized solutions that address clearly identified issues as well as industry concerns and allow the Commission to assess expected outcomes before proposing further reforms,” reads the letter signed by NYSE Chief Operating Officer Michael Blaugrund, Charles Schwab Head of Operations Jason Clague , and Joseph Mecane, Head of Execution Services at Citadel Securities.
As regards the auctions, it is recommended to withdraw the proposal for a number of reasons, including the unprecedented nature of requiring certain market participants to use a specific trading protocol. “At a minimum, the proposal should be suspended indefinitelyuntil the quality impact of performing other suggested changes is known, they wrote.
As for the best execution, wrote that they all strongly support the principle of best execution, but likewise recommend withdrawing the SEC’s proposal on the matter. “We are concerned that the current best execution proposal, with overly prescriptive and impractical requirements for handling a new category of so-called conflicted transactions, could unnecessarily interrupting decades of progress of the market for investors”, it is pointed out.