The testimony also included the principles that SIA sees as vital to effective market-structure reform. The association believes that any changes to the markets must: foster investor protection; encourage fair competition; promote effective intermarket trading; maintain fair and orderly markets; support equal regulation; and, ensure quality and fairly priced market data.
These principles formed the basis of SIA’s deliberations on Regulation NMS proposals and the recommendations the association submitted in response to the Securities and Exchange Commission’s rule proposal. The comments and recommendations SIA submitted then and incorporated in the testimony, include:
- Efficient linkages among markets are needed to improve access to quotes and orders and to achieve intermarket price protection. The SEC’s proposed market-access standards for private linkages will strengthen intermarket connectivity, but issues remain related to some small and relatively inactive markets. Given the industry’s differing support for the solutions proposed, more study is needed to ascertain the potential impact.
- The industry is divided over the SEC’s proposal to address long-standing issues over access fees. Some member-firms accept the commission’s de minimus access fee proposal as a fair compromise; others consider it an inappropriate solution. There is general support for some type of regulation of access fees.
- SIA supports the SEC’s proposed rule to minimize locked and crossed markets, subject to certain exceptions.
- SIA supports the SEC’s proposed ban on sub-penny quoting, due to the adverse effects of sub-penny pricing.
- SIA advocates cost-based market–data fees and greater transparency in market-data fee-setting and governance structures.
