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December 1, 2004

SEC Is Divided On Reg NMS

By Gregory Bresiger

The Securities and Exchange Commission is still split on the Reg NMS package of market structure reforms. The Commission is scrambling to finish it, but is unlikely to do so in the coming weeks, several sources told Traders Magazine.

The short-term scenario still remains approval for parts of Reg NMS, which is a comprehensive set of proposals including the trade-through rule; subpennies, access fees and market data.

SEC officials had previously said the Commission hoped to enact some of these reforms by the end of 2004.

However, this might be a bit of wishful thinking. "Don't expect any significant movement by the SEC on the Reg NMS package this soon," said one lobbyist. "The commission is locked on the issue."

Dramatic Change

Several other Washington lawyers - who lobby for the industry and also declined to be quoted by name - agreed. The problem, they say, is that some commissioners believe that dramatic restructure is not needed.

"Several commissioners have said that they would rather just leave the whole market structure issue alone and let the industry hammer things out itself," says one lobbyist. Others said that the SEC is also hesitant because several commissioners are likely lame ducks who will not be re-appointed by the next administration.