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Securities Industry Asks Big Questions About SEC’s Equity Market Reforms, Global Risk Regulator

March 06, 2023

In December 2022, the US Securities and Exchange Commission (SEC) released the Regulation Best Execution proposal—under the Securities and Exchange Act of 1934—alongside three other proposals covering a wide range of market structure issues in the equity markets.

Partner Ignacio Sandoval’s comments on some of the logistical questions relating to the four proposals are featured in a Global Risk Regulator article. He said that the SEC noted that some exchanges meet the 1% volume threshold to set up auctions but was silent on alternative trading systems (ATSs) meeting the threshold. The proposal says at least six exchanges will likely operate auctions, each having to create rule sets that must go through a notice and comment period.

For ATSs to set up auctions, Ignacio said, the Financial Industry Regulatory Authority (FINRA) will have to amend its Alternative Display Facility rules to enable them to disseminate auction information—which must go through a notice and comment period.

“I can easily see the exchanges objecting to any FINRA proposal that makes it easier for ATSs to compete against them and operate auctions,” he said.

Read the full Global Risk Regulator article >>
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