FIA submitted a comment letter today in response to the Securities and Exchange Commission's (SEC) call for additional feedback on a proposal by the Chicago Stock Exchange, Inc. (CHX) to introduce a new type of speed bump, the Liquidity Taking Access Delay (LTAD). FIA PTG's original letter to the SEC argued that speed bumps are fundamentally incompatible with Reg NMS and, further, that the LTAD is not designed to protect investors and the public interest, would permit unfair discrimination, and would impose unnecessary, inappropriate burdens on competition.
In today's letter, FIA PTG expanded on those points, specifically detailing the problems with the asymmetric nature of the speed bump, the unfair discrimination it creates among market participants, and the violation of the firm quote rule, among other concerns.
Additionally, FIA PTG reiterated the need for a holistic review to address the fundamental complexity in market structure instead of taking a piecemeal approach to individual exchange proposals. "Without regulatory action to comprehensively address the complexity engendered by the current market structure, proposals like these will continue to multiply like a self-perpetuating computer virus, further complicating and distorting market incentives," FIA PTG concluded.