In remarks to the Security Traders Association, the U.S. Securities and Exchange Commission’s Division of Trading and Markets director provided an update on the review of equity market structure rules and the expansion of tokenized and other novel securities products. The division expects to recommend changes to access fee caps and minimum pricing increments alongside any change to Rule 611, which the SEC proposed rescinding in June. Its analysis of more than 1,200 comments has highlighted support for limiting the national best bid and offer to automated quotes and coordinating Rule 611 reform with updated best execution requirements. The director also reviewed the SEC’s five-year conditional exemption for venues using automated market makers to trade tokenized National Market System stocks. Eligible venues must meet conditions including U.S. person status, use of public permissionless blockchains, volume limits, preservation of the underlying shares’ rights and an issuer right to object. Separately, five derivatives exchanges filed to register as security futures exchanges in September, and the director expects at least four to begin trading perpetual futures on securities during the fourth quarter. That expansion comes as SEC staff separately examines conflicts arising when exchanges are affiliated with broker-dealers that provide customer access, custody or margin services.
U.S. Securities and Exchange Commission trading markets director signals coordinated Reg NMS recommendations and near-term perpetual futures launches
The U.S. Securities and Exchange Commission’s trading markets director expects recommendations on access fee caps and pricing increments to accompany any change to the trade-through rule. The director also reviewed the conditional framework for tokenized stock venues and expects at least four exchanges to begin trading perpetual futures on securities in the fourth quarter. SEC staff is separately examining conflicts involving exchange affiliations with broker-dealers.