.jpg)
Individual investors deserve to get the best price when he or she…or the institutions representing them…invest their hard earned funds in the stock market. The Securities and Exchange Commission is considering proposals to give-up investors' right to the best price. As one who represents individual investors, it is wrong for market professionals and executives of the institutions that are promoting this proposal to break their trust with their own customers, in an effort to increase their profitability.
Research on this subject will not surprise anyone. Individual investors don't really know or understand the details or complexity of the issues involving the "trade-through" or "best-price" rule. They never worried that the institutions they entrusted with their money, and the government agency that is supposed to protect them, would be proposing the elimination of a requirement that assures the real investor of getting the benefit of the best price when buying or selling stock of NYSE-listed companies.
One proposal to let institutions "opt out" of the rule that provides the real investor with the best price is totally antithetical to everything that Congress and the SEC have done to improve trust in the markets. Calls for increased speed have been recently addressed by the New York Stock Exchange, thereby eliminating the only argument that had even minimal merit. To eliminate the best-price rule would do nothing but further weaken the integrity of the markets and the increasing trust in our regulators.
The individual investor may not yet understand what is being contemplated, but if they are once again ignored in favor of large institutions, it will undermine much of what all that the exchanges, the regulators and Congress have done to rebuild their trust. During the SEC's forthcoming comment period, I urge individual investors to protect their right to the best price by asking the SEC to keep the best-price rule in place.
Kurt Stocker
Adjunct Professor,
Medill School of Journalism
Northwestern Univeristy
Kurt Stocker serves as chairman of the New York Stock Exchange Individual Investor Advisory
