On December 14, 2022, the U.S. Securities and Exchange Commission (SEC) proposed rules that would establish variable minimum pricing increments, or “tick sizes,”1 for the quoting and trading of national market system (NMS) stocks (i.e., exchange-listed equities and exchange-traded funds) under Rule 612 of Regulation NMS and reduce access fee2 caps for trading against a protected quotation under Rule 610 of Regulation NMS (the Proposal).3 The Proposal would also accelerate the modified round lot definition and inclusion of odd-lot4 information into consolidated market data to increase the transparency of better-priced orders in the market given delays in the implementation of the SEC’s December 2020 Market Data Infrastructure Rules (MDI Rules).5 The Proposal would also amend the odd-lot information definition adopted under the MDI Rules to require the identification of the “best odd-lot order.”
The comment deadline is March 31, 2023, or 60 days after publication of the Proposal in the Federal Register, whichever is later. The Proposal was made concurrently with three other SEC proposals that are interrelated and could significantly change practices related to securities order handling and execution.6 The proposals collectively appear to advance the SEC’s view that better prices for investors may result through encouraging competition among trading venues and increasing trading through certain exchanges or alternative trading systems (ATSs) that disseminate quotations rather than over-the-counter (OTC) market makers.7
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