ICI Urges SEC to Finalize Proposal on Transaction Fee Pilot for NMS Stocks

The Investment Company Institute ("ICI") urged the SEC to adopt the SEC proposal that would establish a pilot program to evaluate how exchange transaction fees and rebates affect market quality for national market system ("NMS") stocks.

As previously covered, the proposed new rule - Regulation NMS Rule 610T - provides for a pilot program to monitor the effects of transaction-based fees and rebates on order routing behavior, execution quality and market quality. ICI stated in a comment letter that it "emphatically" believes the proposal will benefit investors by generating data that the SEC can use to assess whether permanent changes to Regulation NMS Rule 610(c) would improve equity market quality. Further, ICI (i) outlined procedures as to how the pilot program might be conducted and (ii) encouraged the SEC to commit to conducting an comprehensive evaluation of equity market quality.