SEC To Review Equity Market Rules

Reuters reported Monday that the U.S. Securities and Exchange Commission is "undertaking a comprehensive data-driven review of the rules underpinning the U.S. equity markets, including the pricing and rebate system used by exchanges," according to SEC Chair Mary Jo White.

According to the report, the "SEC is looking at its National Market System rule set, as well as the role of exchanges acting as self-regulated organizations, to see if adjustments should be made to help reduce complexity, improve transparency and make the markets more robust."

The regulator is examining how exchanges implement the "maker-taker" model which utilizes a fee-based incentive structure to attract traders. White said the "Maker taker is one of the issues we've heard a lot about. It's clearly an important priority as we're going through this review, but again, we want to be data-driven and be right about whatever adjustments that we make."

White indicated “that the SEC plans to finalize, possibly by year-end, a new rule known as Regulation Systems Compliance and Integrity, which focuses on strengthening exchanges and certain "dark pool" trading venues against technology failures and cyber attacks."

The report concluded with White saying, "You never get to a point where you sort of declare 'mission accomplished. The markets have evolved and continue to evolve and technology is continuing to evolve, and so it is a process to enhance the resiliency and robustness of the market."