Specifically, the NYSE suggests prohibiting broker-dealers from trading against their customer orders unless they provide a price to the order that is better than the national best bid or offer against which the order might otherwise be executed. The SIA strongly supports the elimination of Rule 390. Recent developments have reinvigorated competition in the U.S. equity markets to the benefit of public investors. New market participants have fostered greater innovation leading to narrower spreads and lower transaction costs. A greater number and variety of participants are accessing the markets than ever before.
Volume is at unprecedented levels.
The transformation underway in our markets must not be impeded by restrictions that distort competition and introduce additional costs. Rule 390 was originally intended to maximize the opportunity for investors' orders to interact with one another in agency auction markets and be executed without dealer intervention. Technological advances and recent regulatory developments, however, have led to the development of a host of alternative trading systems that provide a similar capability operating alongside the established markets in an intensely competitive environment. There is simply no justification for regulations such as Rule 390 that restrict off-board trading. We therefore urge the Commission to act expeditiously to remove this barrier and to unleash even greater competition in our markets.