SEC Proposes to Scrap Trade-Through Rule for Equities Execution

The Securities and Exchange Commission (SEC) proposed on March 13, 2024, to eliminate the trade-through rule for equity executions. This rule, part of the National Market System (NMS) rules, mandates that brokers must seek to obtain the best available price for their customers' orders across different exchanges. The SEC's proposal suggests that repealing this rule could lead to more efficient equity market operations and potentially lower costs for investors. The agency cited a review of market structure and technological advancements as reasons for reconsidering the rule, which has been in place for nearly two decades. The proposed change aims to streamline the execution process and allow for greater flexibility in how trades are routed and executed. The SEC is seeking public comment on the proposal, which could significantly alter how stock trades are handled in the U.S. equity markets.