Breaking News
Investing Pro 0
⏰ React to the Market Faster with Custom, Real-Time News Get Started

U.S. SEC votes to advance stock market overhaul proposals

Stock Markets Dec 14, 2022 06:58PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The Wall Street entrance to the New York Stock Exchange (NYSE) is seen in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

By John McCrank

NEW YORK (Reuters) -The U.S. Securities and Exchange Commission on Wednesday voted to propose some of the biggest changes to American equity market structure in nearly two decades, aimed at boosting transparency and fairness while increasing competition for individual investors' stock orders.

The proposals include requiring marketable retail stock orders to be sent to auctions before they are executed, a new standard for brokers to show they get the best possible executions for client orders, and lower trading increments and access fees on exchanges, the SEC said.

"We feel that these reforms, if enacted, will ultimately help the price discovery process and save investor’s money," said Joe Saluzzi, co-manager of trading at Themis Trading.

"Allowing orders to interact with each other, rather than segmenting them, will enhance competition and yield better prices."

Opening up individual investor orders that can be immediately executed to competitive auctions could lead to "significantly" better prices for investors, the SEC said. Under current practice, retail brokers send most such orders to wholesale brokers, sometimes for a fee.

"The competitive shortfall could be worth about $1.5 billion annually, compared with current practice — money that could go back into retail investors' pockets," said SEC Chair Gary Gensler.

The changes, if adopted, would represent the biggest shakeup to stock market rules since the SEC introduced Regulation National Market System in 2005, which was aimed at modernizing and enhancing an increasingly fragmented and largely electronic marketplace.

Ronan Ryan, president and co-founder of exchange operator IEX Group Inc said the reforms were a "constructive and positive effort to improve transparency, increase competition, and ensure that investors can access the best prices available in the market."

"It has been 17 years since the existing equity rules were adopted, and since that time, the stock market has seen significant change – including the advent of high-frequency trading, a dramatic decline in displayed liquidity on exchange, and a substantial rise in off-exchange trading," said Ryan.

"Modernizing regulation ensures that market competition among brokers, market makers, and exchanges continues to benefit investors.”

The order competition rule, which would require marketable retail orders to be sent to auctions, could lead to more such orders being matched on exchanges, like the Nasdaq or Intercontinental Exchange (NYSE:ICE) Inc's New York Stock Exchange, rather than by wholesale brokers, like Citadel Securities and Virtu Financial (NASDAQ:VIRT).

Nasdaq said it believes in "transparent, fair, efficient, competitive and inclusive markets and that it looks forward to reviewing the SEC’s proposals.

Citadel Securities said in a statement that "any proposed changes must provide demonstrable solutions to real problems while avoiding unintended consequences that will hurt American investors."

Firms that benefit from the status quo, such as wholesalers and retail brokers that receive payments from them, will likely fight the SEC’s proposals, said Stephen Hall, Better Markets' Legal Director and Securities Specialist.

"It is imperative that the SEC resist industry pressure, carefully consider all stakeholder input, and finalize a set of rules that will truly help investors at long last to get a better deal on Wall Street," said Hall.

The SEC also voted to propose requiring brokers to provide more information on the quality of their customer trades, while also expanding the number of firms that must file the order execution reports.

The proposed changes will be put up for public comment until at least March 31 before the regulator moves to finalize the rules, which will also be voted on.

The regulator also voted to expand disclosures around the trading of company shares by insiders, such as executives and directors, that have received equity-based compensation.

U.S. SEC votes to advance stock market overhaul proposals

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Alex Chan
Alex Chan Dec 14, 2022 9:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
dammit ... no fee trades will be a thing of the past
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email