SEC EMSAC Approves Recommendations on NMS Access Fee Cap Pilot Program

The SEC Equity Market Structure Advisory Committee (the "EMSAC") approved a Regulation NMS Subcommittee recommendation that the SEC propose a pilot program (the "Pilot") to adjust the access fee cap under Rule 610 to better understand the effect of access fees on liquidity provision, liquidity taking and order routing.

The proposed Pilot framework would include varying levels of "access fee caps" divided into four separate "buckets": (a) Bucket 1 – control bucket, (b) Bucket 2 – $.0020 access fee cap, (c) Bucket 3 – $.0010 access fee cap and (d) Bucket 4 – $.0002 access fee cap. The Bucket 4 access fee cap is intended to create a bucket where any rebate would result in a de minimis economic incentive.

In addition, the EMSAC unanimously approved the Trading Venue Regulation Subcommittee recommendations to (i) make the role of NMS Plan Advisory Committees more significant, formalized, and uniform and (ii) link the implementation date of those rule changes that require technology changes by the industry to the publication of technical specifications or FAQs, where appropriate.

The EMSAC is scheduled to meet again on August 2, 2016, to consider recommendations made by the Customer Issue and Market Quality Subcommittees.