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Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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November 1, 2004

The Golden Dems Target Old Reg

By Editorial Staff

The trade-through rule, which was designed to find the best price on stocks in the listed markets, is "obsolete" and should be abolished. That's what a dozen members of the U.S. House of Representatives from California recently wrote in a letter to the Securities and Exchange Commission.

"The trade through rule as it stands today is obsolete. Individuals and institutions will benefit from greater control over their own trades," the lawmakers, all Democrats, wrote in a letter to SEC Chairman William Donaldson.

"Like most Americans," according to the letter, "Californians rely on private and public pension funds to help them guarantee a secure future for themselves and their children. These funds must be given the tools they need to safeguard and grow the investments of hundreds of thousands of Californians."

Among those representatives signing the letter to Donaldson were Tom Lantos, Linda Sanchez, Zoe Lofgren and Mike Honda. "We just think that the trade-through rule just doesn't make sense. It hinders the markets and it doesn't give the investors the speed of execution that is needed in this electronic age," according to Jay Staunton, a spokesman for Honda. The state's pension fund, Calpers, has also joined in calling for the abolition of the trade through rule as have Charles Schwab.

The Honda spokesman said that the dozen lawmakers had yet to hear back from Donaldson.