SEC Punts on Transaction Fee Pilot for Now

Traders Magazine Online News, April 1, 2019

Reuters

The following article originally appeared on Reuters

The U.S. Securities and Exchange Commission delayed a controversial plan aimed at evaluating how stock exchange fees and incentives affect how brokers trade, while the exchanges sue the regulator in an attempt to kill the experiment.

The SEC approved its so-called Transaction Fee Pilot in December, aimed at testing how lucrative rebate payments from exchanges to brokers for stock orders that others can trade against influences brokers’ behavior.

But Nasdaq Inc, Cboe Global Markets and Intercontinental Exchange Inc’s NYSE, which together own 12 of the 13 U.S. stock exchanges, all filed lawsuits against the SEC in February saying the plan was an exercise in government price-setting and would put controls on competition.

“Without addressing the merits of petitioners’ challenges to the rule or the pilot program, the Commission has determined to exercise that discretion to grant a stay, in part. Pending a decision by the court of appeals,” the SEC said as it put the plan on hold on Thursday.

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