The FIA PTG submitted a letter to the SEC’s Equity Market Structure Advisory Committee ahead of today's meeting on Rule 611 of SEC Regulation NMS, known as the “Order Protection Rule” or “Trade-through Rule.” The full text of the letter follows, and a signed copy is linked here.
May 8, 2015
Brent J. Fields
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-1090
Re: File Number 265-29
Dear Mr. Fields:
The first meeting of the SEC’s Equity Market Structure Advisory Committee will focus on Rule 611 of SEC Regulation NMS, known as the “Order Protection Rule” or “Trade-through Rule.” The FIA Principal Traders Group (FIA PTG) applauds the Commission’s openness to explore data-driven changes to REG NMS and the current equity market structure as part of its holistic market structure review.
Earlier this year, the FIA PTG published a brief set of recommendations regarding simplification of the US equity market structure. These recommendations, as detailed in the attached paper, include the elimination of Rule 611 in order to simplify the markets in meaningful ways and provide other important benefits for the investing public.
It is important to note that many aspects of market structure are closely interrelated and should not be viewed in isolation. While Rule 611 is a good place to start, it should be studied in connection with Rule 610.d of Regulation NMS (the prohibition on displaying locked and crossed markets), best execution standards and various disclosure rules (including Rules 605 and 606 of Regulation NMS). The attached paper reviews some of our recommendations in those areas, as well.
FIA PTG welcomes the opportunity to discuss these recommendations with you, your Staff or with the Equity Market Structure Advisory Committee. If you have any questions about these comments, or if we can provide further information, please do not hesitate to contact Mary Ann Burns (firstname.lastname@example.org).
FIA Principal Traders Group
Mary Ann Burns
Chief Operating Officer