Reg NMS - Fade to Dark (pools)
New York – In this week’s Wall Street Letter there is an
article entitled “STA Pushes for Reg NMS Rule Appeal”. Of course, the main issue with Reg NMS is the
best price provision, which means that orders need to be done at the best quoted
price on automated exchanges (OPR).
The Security Traders Association (STA) indicates that the
legislation is not doing what it was intended to do and points to 17 exemptions
from the rule as an indication that the rule is really not needed.
There are those that point to the rule as another reason to
push volume into dark pools and hence reducing the amount of displayed liquidity.
Still, the fact that the rule has already caused the
expenditure of millions of dollars as firms bring trading systems up to scratch
to handle the requirements, and the attitude of the SEC that the rule simply
provides additional incentives to display prices, seems to be enough to suggest
that the STA will find it difficult to amend Reg NMS.
Posted at 09:22 am by Thomas Hutchinson
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