FIA PTG submitted comments to the SEC opposing the delay mechanism proposed by NYSE MKT. The NYSE MKT speedbump introduces an intentional delay in protected quotes which creates undue complexity in markets and amplifies the risk of market disruptions during periods of high volatility.
FIA PTG noted that since the approval of the IEX exchange application and speedbump, there have been three more unique latency introducing mechanisms proposed. To date, the Commission has not approved any of these proposals – one has been withdrawn and two are pending. It is unclear what criteria the Commission will use to approve or deny these proposals. FIA PTG urged the SEC to impose a moratorium on new types of artificial delays and instead take action to address the fundamental complexity in market structure. Finally, recognizing the time required to undertake and implement holistic reform, FIA PTG recommended the interim step of eliminating both Rules 610.d and 611 and modernizing best execution requirements to simplify the markets in meaningful ways.
The full text of the letter is available here.
