Date: March 29, 2017
Liz Pierce, 212.313.1173, firstname.lastname@example.org
SIFMA Comments on Potential Revisions to
York, N Y, March 29, 2017 – SIFMA today submitted to the SEC a set of
recommendations for review of the SEC’s Regulation NMS, which governs trading
of the equities markets. Acting Chairman
Michael Piwowar has requested industry comments on Regulation NMS, and the SEC
has established a public comment period in advance of the April 5, 2017 meeting
of the Equity Market Structure Advisory Committee. SIFMA appreciates the opportunity to
provide its members’ on-the-ground insight regarding potential revisions to
modernize Reg NMS and address unintended consequences.
NMS has had a tremendous impact to investors and to the equities market. It has
largely achieved its goal of creating an automated, accessible equities market
that provides investors with the best possible price when purchasing stock.
However, Reg. NMS has also contributed to a highly complex and fragmented stock
market with a significant focus on the speed of execution.
have evolved considerably since Reg NMS was adopted. Now is a very appropriate
time for the SEC to review the intent of Regulation NMS, its real-world impacts
to investors, and possible rule changes to increase its effectiveness,” said Randy
Snook, executive vice president, business policies and practices.
SIFMA’s letter is
meant to encourage discussion between the SEC and market participants on the
following provisions of NMS to determine where investors and the market may be
better served by either potentially modifying Reg. NMS or maintaining the
status quo. Ultimately, SIFMA’s goal is to improve market resilience and ensure
the equity market continues to benefit investors and play an essential role in
Order Protection Rule: To address
market fragmentation and complexity, the SEC should evaluate the OPR and
consider whether modifications or exemptions are needed, potentially including
a volume threshold for protected quotation status and a block exemption for
orders of significant size. The SEC also could consider an elimination of the
OPR coupled with enhanced best execution principles or maintaining the status
Access Fees: The existing
cap on access fees under Regulation NMS has become outsized relative to today’s
market realities.To address this, the
SEC should consider: (1) reducing the access fee cap to no more than $0.0005
for all securities; (2) implementing the SEC’s Equity Market Structure Advisory
Committee’s access fee pilot recommendation; or (3) eliminating rebates and
linkages between passive, posting of limit orders and transaction pricing.
Market Data: To assure that
market data is timely, comprehensive, non-discriminatory, and accessible to all
market participants at a reasonable cost, the SEC should consider: (1)
enhancing the Securities Information Processors (“SIP”) feeds with bid and
offer quotes beyond the top of book data and providing that as the sole source
of consolidated market data to meet regulatory obligations; and (2) replacing
the single-consolidator SIP model of market data dissemination with a
competitive construct, such as a Competing Market Data Aggregators (“CMDA”)
NMS Plan Governance: To address
conflicts of interests and enhance the NMS Plan structure, the SEC should
provide broker-dealers and asset managers with meaningful direct voting
representation on the NMS Plan Operating Committees.
SIFMA’s letter further addresses alternatives to improve the
functioning of the National Market System and is available here: http://www.sifma.org/issues/item.aspx?id=8589965596. SIFMA is committed to
providing its members’ insight as the SEC moves forward with its review of Reg
SIFMA’s 2014 equity market structure recommendations are available here: http://www.sifma.org/newsroom/2014/sifma-publishes-recommendations-for-enhancing-fairness-stability-and-transparency-in-us-equity-markets/.
SIFMA is the voice of the U.S. securities industry.
We represent the broker-dealers, banks and asset managers whose nearly 1
million employees provide access to the capital markets, raising over $2.5
trillion for businesses and municipalities in the U.S., serving clients with
over $18.5 trillion in assets and managing more than $67 trillion in assets for
individual and institutional clients including mutual funds and retirement
plans. SIFMA, with offices in New York and Washington, D.C., is the U.S.
regional member of the Global Financial Markets Association (GFMA). For more
information, visit http://www.sifma.org.