Securities trading is leaving the country because of flawed, nebulous rules, including Regulation NMS, a maverick regulator recently said at a Security Traders Association of New York meeting.
Securities and Exchange Commissioner Paul Atkins, one of two commissioners who voted against Reg NMS, used the rule as an example of regulations that are driving trading abroad.
The crown jewel of Reg NMS, the trade-through rule, contained in Rules 610 and 611, mandates the protection of best-priced orders in markets. These rules were “completely unwarranted,” Atkins told the traders.
Why is Atkins fighting a battle he already lost? He argues that implementation of these rules is wreaking havoc as exchanges request and are granted delays in implementing Reg NMS: “The implementation process already has been a rude awakening for many, and we haven’t even gotten to the broker-dealers yet!”
Atkins timed his sharp critique of the regulatory environment to coincide with the release of a report on the competitiveness of U.S. securities markets.
