Michael M. Santiago
The Securities and Exchange Commission proposed on Wednesday a new rule that would prevent national securities exchanges like the New York Stock Exchange and Nasdaq from offering a certain type of volume discount to Wall Street brokerages.
“Currently, the playing field upon which broker-dealers compete is unlevel,” said SEC Chair Gary Gensler in a statement. “Through volume-based transaction pricing, mid-sized and smaller broker-dealers effectively pay higher fees than larger brokers to trade on most exchanges.”
Proposed Rule 6b-1 would prohibit national securities exchanges from offering volume-based transaction pricing for the execution of agency-related orders in NMS (national market system) stocks. It would also require exchanges that offer such pricing to disclose certain information, including the number of members that qualify for each transaction pricing tier that the exchange offers.
The proposed rule would also require exchanges with volume-based pricing for member proprietary orders in NMS stocks to have anti-evasion measures.
A public comment period will remain open for 60 days after the proposed rule is published in the Federal Register.
Shares in Intercontinental Exchange (NYSE:ICE), the owner of the NYSE, slipped 0.5% in Wednesday midday trading. Meanwhile, Nasdaq (NASDAQ:NDAQ) stock gained 5.4% after the exchange and market data company posted better-than-expected Q3 earnings.
