It seems like a good idea for the individual investor, so I brought together some information about it for you folks to look over. I believe that the SEC proposal I identified below is the correct one, but would appreciate it if someone else could look it over to double check. If you agree that it is a good idea, then send your comments to the SEC using the URL near the bottom of this post. You don't have to write a book, just let them know that you support the change.
As is often the case with regulatory changes of any kind, there can be a huge difference between agreement in principle, and agreement to terms. I would readily support the notion of a central limit book, or some equivalent system that would give easy access to the existing limit books. (In fact, I have posted somewhere my belief that all that's needed now is to put ECNs on an equal footing with MMs by making them SOESable.) I read the recent NASD proposals about the limit book, replacing SOES/SelectNet with a sort of limit book concept, and the agency quote proposal. I'm not at all convinced these things are good because the proposed implementation of these "good" ideas might very well create a system that is less favorable to most of us here than exists now.
Before you send your yea vote to the SEC, I would suggest you do the appropriate homework. I'm afraid a well reasoned comment to the SEC that covers the various points in the proposal may verge on writing a book.
I remember when the the state of CT was first considering a bill to create the state income tax. It went something like "let's have a state income tax". No reference to tax rates, structure, etc., etc. Does that make you feel comfortable? The NASD proposals are filled with things like "create an incentive for the MM to ....". It's also full of things they can use to their advantage (e.g. Retain small quote sizes if they choose; we just gave them that so we can't take it back. Allow them to trade 9,900 shares at a crack. Allow the MMs to use the system to trade among themselves). I wonder if anyone has done any kind of study that might reasonable predict the effect of the proposed changes. I think not, but somebody should. I get the impression the NASD is just winging it. I'm not telling you how to vote, but I encourage you to be an informed voter.
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