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Joanna Fields
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Navigating Cybersecurity on a Stretch of "Regulatory Rapids"

In this shared commentary, Aplomb Strategies writes that when considering a firm’s governance structure, a holistic approach makes the most sense.

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March 7, 2008

More Leeway on Reg NMS for Preferred Stock

By Peter Chapman

The Securities and Exchange Commission is likely to exempt nonconvertible preferred stock from Regulation NMS's order-protection rule.

SEC staff recommended that the lightly traded securities be exempted last summer, sources close to the regulator say. If the security is exempted, it would be the 14th exemption or exception to the trade-through rule the SEC has granted.

Any action by the SEC is likely to be anticlimactic, however, as traders are already handling the securities as if they were exempt, sources say. About $214 billion worth of preferred stock is outstanding in the U.S., according to Standard & Poor's. That compares to $16 trillion in common stock and $5 trillion in corporate bonds.

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