SEC Votes to Extend Trade-Through Rule to Electronic Markets
April 6 (Bloomberg) -- The U.S. Securities and Exchange Commission passed a rule guaranteeing that all investors get the best price on all electronic stock trades.
The commission voted 3-2 today to extend the trade-through rule to shares listed on the Nasdaq Stock Exchange. The plan was opposed by some Wall Street executives, who were concerned that the measure will make it more difficult to buy large block trades at a desired price. Some federal legislators also contested the proposal.
``The trade through rule, is in the most fundamental sense, a rule that protects investors,'' said SEC Chairman William Donaldson. ``Our actions today will, I am certain, irritate a handful of influential interests who are able to couch their arguments in broad principles with which we can all agree: the desire to avoid excessive government regulation; the desire to provide investors with choice, the desire to avoid unintended consequences.''
Donaldson, a Republican, sided with Democratic Commissioners Roel Campos and Harvey Goldschmid to pass the rule. Republicans Cynthia Glassman and Paul Atkins voted against it.
``We don't need the trade-through rule on either the New York Stock Exchange or Nasdaq,'' Glassman said, adding the staff's justification for the plan is ``biased, unsupportable or internally inconsistent.''
The rule will apply to a small group of stocks April 10, 2006, to allow market participants to test their systems and procedures. All trading centers would be required to comply with the regulation June 12, 2006. |
