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One Big Fund Company Backs Trade Through'

Traders Magazine, February 2004

Peter Chapman

The Vanguard Group has come out in support of the current trade-through rule. Gus Sauter, chief investment officer of the country's second largest mutual fund company, testified before Congress that investors would be better served if the Intermarket Trading System's trade-through rule were left intact. Traders need more automatic executions, not a weakening of the rules that bind the nations' exchanges, according to Sauter. Sauter made his case during a hearing of the House Financial Services Capital Markets Subcommittee in lower Manhattan last month. The hearing was part of an ongoing review by the subcommittee of the trade-through rule. Sauter maintains the abolition of the trade-through rule would benefit market orders to the detriment of limit orders. "I cannot overstate the value of limit orders," Sauter told the committee. "Limit orders are the backbone of a perfectly liquid market. Limit orders are liquidity."

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