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Fidessa's Steve Grob has written a response to Marcus Ferber writing to ESMA condemning periodic auctions. The blog strongly criticizes Ferber's approach, and looks at the problems behind the "lit is good and dark is bad" attitude.

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June 18, 2008

SEC Plans To Review Reg NMS

By Peter Chapman

The Securities and Exchange Commission, in the wake of industry criticism, says it will review Regulation NMS.

Bob Colby, deputy director, the SEC's Division of Trading and Markets, told conference-goers at the Securities Industry & Financial Markets Association annual market structure conference last month that "we do plan to review [Reg NMS] and consider whether, given the changes in the market, it needs to stay for all time."

Colby, who also called Reg NMS a "success," added that the SEC has always maintained it would review the Reg NMS's effectiveness. However, the review won't take place in the next few months, he said. The regulator's remarks follow a report from the Security Traders Association critical of the Reg NMS rules package, especially its centerpiece order-protection rule.

"The STA is of the opinion that a marketplace without this order-protection rule will be superior to enforcing the current OPR with its approximately 17 exemptions," the trade organization stated.

As for the timing of an SEC review: "Don't look for it in the next few months," Colby said.

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