Davis Polk Discusses SEC Package of Equity Market Structure Proposals

The SEC recently proposed a set of sweeping equity market structure reforms across four rule proposals that would make highly significant changes to how national market system (NMS) stock orders are priced, executed and reported.  The proposals include:

  • a new requirement for certain retail orders to be subject to order-by-order competition, rather than being routed directly to market makers (the Order Competition Rule);
  • an SEC-level best execution rule (the Proposed Regulation Best Ex);
  • an adjustment to the tick sizes at which NMS stocks can be quoted or traded (the Tick Sizes Proposal); and
  • a proposal to expand the scope and

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