When market participants submit orders to buy or sell shares of an NMS stock, the difference
summary
The U.S. SEC proposed regulatory reforms to introduce variable tick sizes, reduce access fee caps, and enhance transparency of odd-lot orders to improve market efficiency, with no fraud, charges, or penalties involved.
paragraph
The U.S. Securities and Exchange Commission proposed amendments to Regulation NMS to replace the flat $0.01 minimum pricing increment with variable tick sizes of $0.001, $0.002, $0.005, or $0.01 based on a stock’s time-weighted average quoted spread. It also sought to lower access fee caps to $0.0005 or $0.001 per share depending on tick size and mandated that all fees and rebates be determinable at the time of execution. No fraud, misconduct, or financial penalties are associated with this proposal—it is a regulatory initiative to enhance price competition and market transparency, with public comments accepted until March 31, 2023.
narrative
The U.S. Securities and Exchange Commission proposed regulatory reforms to modernize market structure rules under Regulation NMS, aiming to improve price discovery and market efficiency. The key changes include introducing variable minimum pricing increments—$0.001, $0.002, $0.005, or $0.01—for NMS stocks priced at or above $1.00, replacing the current flat $0.01 tick size and allowing more granular pricing based on liquidity conditions. The proposal also reduces access fee caps to $0.0005 per share for stocks with a $0.001 tick size and $0.001 for others, while requiring all fees and rebates to be clearly determinable at the time of order execution. Additionally, the SEC seeks to accelerate implementation of the Market Data Infrastructure Rules to enhance transparency of odd-lot and round-lot orders, requiring exclusive securities information processors to collect and disseminate odd-lot data. These reforms are designed to enable buyers and sellers to achieve better prices through increased competition and information availability. No allegations of fraud, misconduct, or enforcement actions are present; this is purely a regulatory proposal open for public comment, with a comment deadline of March 31, 2023. The changes would apply across all trading venues, including exchanges, alternative trading systems, and over-the-counter markets. The goal is to reduce the constraints imposed by the current one-size-fits-all tick size and foster a more dynamic, transparent, and efficient market.
Classified non-corporate(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Parties
access fee capsminimum pricing incrementsSecurities and Exchange Commission
Keywords
minimum pricingnmsminimumstockspricing incrementproposed amendmentsnational securitiespricedpricingmarketorderssecuritiessecurities exchangeodd-lot informationfee
Extracted insights
Entities 3
- person access fee caps
- person minimum pricing increments
- agency Securities and Exchange Commission
Triples 5
- Securities and Exchange Commission Proposed Rule Amendments
- Securities and Exchange Commission Amend Minimum Pricing Increments
- Securities and Exchange Commission Reduce Access Fee Caps
- Securities and Exchange Commission Accelerate Implementation Of Round Lot And Odd-Lot Information Definitions
- Securities and Exchange Commission Amend Odd-Lot Information Definition
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Extracted body text (6,254c)
Warning: TT: undefined function: 32 FACT SHEET Tick Sizes, Access Fees, and Transparency of Better Priced Orders U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2 Why This Matters When market participants submit orders to buy or sell shares of an NMS stock, the difference between the best buy order and best sell order is the “bid-ask spread.” Rule 612 sets forth a minimum pricing increment of $0.01 for quotes and orders in NMS stocks priced at or greater than $1.00, which prevents bid-ask spreads for these stocks from being less than $0.01. Today, many NMS stocks are constrained by the minimum pricing increment that is required under Rule 612 and thus are not able to be priced by market forces. That is, based on liquidity and price competition, these stocks could be priced more aggressively within the bid-ask spread than is possible with the current minimum pricing increment of $0.01. These stocks are considered to be “tick-constrained,” and they make up the majority of current trading volume. Trading in these stocks would be improved if competitive market forces could establish prices in sub-penny increments and enable buyers to obtain lower prices from willing sellers and sellers to obtain higher prices from willing buyers. Further, the MDI Rules enhanced transparency about better priced orders available in the market. Accelerating implementation of certain of the MDI Rules would provide investors with useful information about the best priced orders available in the market. The Securities and Exchange Commission proposed rule amendments that would: ● Amend the minimum pricing increments, also known as tick sizes, under Rule 612 of Regulation NMS to establish a variable minimum pricing increment model that would apply to both the quoting and trading of NMS stocks, which are stocks listed on a national securities exchange, regardless of trading venue; ● Reduce the access fee caps under Rule 610 of Regulation NMS in conjunction with the reduction of the minimum pricing increments and require national securities exchanges to make the amounts of all fees and rebates determinable at the time of execution; ● Accelerate the implementation of the round lot and odd-lot information definitions adopted in 2020 under the Market Data Infrastructure Rules (“MDI Rules”); and ● Amend the odd-lot information definition adopted under the MDI Rules to require the identification of the best odd-lot order. An odd-lot order is an order for the purchase or sale of an NMS stock in an amount less than a round lot (typically 100 shares). FACT SHEET | Tick Sizes, Access Fees, and Transparency of Better Priced Orders U.S. SECURITIES AND EXCHANGE COMMISSION Page 2 of 2 How the Rules Would Apply Minimum Pricing Increments. The proposed amendments to Rule 612 would set forth variable minimum pricing increments that apply to quoting and all trading—on exchanges, alternative trading systems, and over-the-counter—with certain exceptions. The following minimum pricing increments would be established for quotations, orders, indications of interest, and trades in NMS stocks priced equal to or greater than $1.00 per share: Minimum Pricing Increment If the Time Weighted Average Quoted Spread for the NMS stock during the Evaluation Period was: $0.001 Equal to or less than $0.008 $0.002 Greater than $0.008 but less than or equal to $0.016 $0.005 Greater than $0.016 but less than or equal to $0.04 $0.01 Greater than $0.04 Access Fees. The proposed amendments to Rule 610 would reduce the level of the access fee caps, which limit the fees that can be charged for trading against the best priced quotations displayed in any market. For quotations in NMS stocks priced at $1.00 or more, the access fee cap would be $0.0005 per share for NMS stocks that have a minimum pricing increment of $0.001; and the access fee cap would be $0.001 per share for NMS stocks that have a minimum pricing increment greater than $0.001. For quotations in NMS stocks priced less than $1.00, the access fee cap would be 0.05 percent of the quotation price. The proposed amendments to Rule 610 would also prohibit a national securities exchange from imposing, or permitting to be imposed, any fee, or providing, or permitting to be provided, any rebate or other remuneration for the execution of an order in an NMS stock unless such fee, rebate, or other remuneration can be determined at the time of execution. Any national securities exchange that imposes a fee or provides a rebate that is based on a certain volume threshold, or establishes tier requirements or tiered rates based on minimum volume thresholds, would be required to set such volume thresholds or tiers using volume achieved during a stated period prior to the assessment of the fee or rebate. This would enable market participants to determine what fee or rebate level would be applicable to any submitted order at the time of execution. Transparency of Better Priced Orders. The proposed amendments would accelerate the date by which market participants must comply with the odd-lot information and round lot definitions adopted under the MDI Rules to 90 days from Federal Register publication of any Commission adoption of an earlier implementation for these definitions. The proposed amendments to Rule 603(b) would require the existing exclusive securities information processors (“exclusive SIPs”) to collect, consolidate, and disseminate odd-lot information and require national securities exchanges and associations to provide the data necessary to generate odd-lot information to the exclusive SIPs. Finally, the proposed amendments to the definition of odd-lot information under Rule 600(b) would include a new data element that would identify the best odd-lot orders to buy and sell across all national securities exchanges and national securities associations. Additional Information: The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication of the proposing release in the Federal Register, whichever is later.
OCR text (6,246c · tika · 95% conf)
FACT SHEET Tick Sizes, Access Fees, and Transparency of Better Priced Orders U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2 Why This Matters When market participants submit orders to buy or sell shares of an NMS stock, the difference between the best buy order and best sell order is the “bid-ask spread.” Rule 612 sets forth a minimum pricing increment of $0.01 for quotes and orders in NMS stocks priced at or greater than $1.00, which prevents bid-ask spreads for these stocks from being less than $0.01. Today, many NMS stocks are constrained by the minimum pricing increment that is required under Rule 612 and thus are not able to be priced by market forces. That is, based on liquidity and price competition, these stocks could be priced more aggressively within the bid-ask spread than is possible with the current minimum pricing increment of $0.01. These stocks are considered to be “tick-constrained,” and they make up the majority of current trading volume. Trading in these stocks would be improved if competitive market forces could establish prices in sub-penny increments and enable buyers to obtain lower prices from willing sellers and sellers to obtain higher prices from willing buyers. Further, the MDI Rules enhanced transparency about better priced orders available in the market. Accelerating implementation of certain of the MDI Rules would provide investors with useful information about the best priced orders available in the market. The Securities and Exchange Commission proposed rule amendments that would: ● Amend the minimum pricing increments, also known as tick sizes, under Rule 612 of Regulation NMS to establish a variable minimum pricing increment model that would apply to both the quoting and trading of NMS stocks, which are stocks listed on a national securities exchange, regardless of trading venue; ● Reduce the access fee caps under Rule 610 of Regulation NMS in conjunction with the reduction of the minimum pricing increments and require national securities exchanges to make the amounts of all fees and rebates determinable at the time of execution; ● Accelerate the implementation of the round lot and odd-lot information definitions adopted in 2020 under the Market Data Infrastructure Rules (“MDI Rules”); and ● Amend the odd-lot information definition adopted under the MDI Rules to require the identification of the best odd-lot order. An odd-lot order is an order for the purchase or sale of an NMS stock in an amount less than a round lot (typically 100 shares). FACT SHEET | Tick Sizes, Access Fees, and Transparency of Better Priced Orders U.S. SECURITIES AND EXCHANGE COMMISSION Page 2 of 2 How the Rules Would Apply Minimum Pricing Increments. The proposed amendments to Rule 612 would set forth variable minimum pricing increments that apply to quoting and all trading—on exchanges, alternative trading systems, and over-the-counter—with certain exceptions. The following minimum pricing increments would be established for quotations, orders, indications of interest, and trades in NMS stocks priced equal to or greater than $1.00 per share: Minimum Pricing Increment If the Time Weighted Average Quoted Spread for the NMS stock during the Evaluation Period was: $0.001 Equal to or less than $0.008 $0.002 Greater than $0.008 but less than or equal to $0.016 $0.005 Greater than $0.016 but less than or equal to $0.04 $0.01 Greater than $0.04 Access Fees. The proposed amendments to Rule 610 would reduce the level of the access fee caps, which limit the fees that can be charged for trading against the best priced quotations displayed in any market. For quotations in NMS stocks priced at $1.00 or more, the access fee cap would be $0.0005 per share for NMS stocks that have a minimum pricing increment of $0.001; and the access fee cap would be $0.001 per share for NMS stocks that have a minimum pricing increment greater than $0.001. For quotations in NMS stocks priced less than $1.00, the access fee cap would be 0.05 percent of the quotation price. The proposed amendments to Rule 610 would also prohibit a national securities exchange from imposing, or permitting to be imposed, any fee, or providing, or permitting to be provided, any rebate or other remuneration for the execution of an order in an NMS stock unless such fee, rebate, or other remuneration can be determined at the time of execution. Any national securities exchange that imposes a fee or provides a rebate that is based on a certain volume threshold, or establishes tier requirements or tiered rates based on minimum volume thresholds, would be required to set such volume thresholds or tiers using volume achieved during a stated period prior to the assessment of the fee or rebate. This would enable market participants to determine what fee or rebate level would be applicable to any submitted order at the time of execution. Transparency of Better Priced Orders. The proposed amendments would accelerate the date by which market participants must comply with the odd-lot information and round lot definitions adopted under the MDI Rules to 90 days from Federal Register publication of any Commission adoption of an earlier implementation for these definitions. The proposed amendments to Rule 603(b) would require the existing exclusive securities information processors (“exclusive SIPs”) to collect, consolidate, and disseminate odd-lot information and require national securities exchanges and associations to provide the data necessary to generate odd-lot information to the exclusive SIPs. Finally, the proposed amendments to the definition of odd-lot information under Rule 600(b) would include a new data element that would identify the best odd-lot orders to buy and sell across all national securities exchanges and national securities associations. Additional Information: The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication of the proposing release in the Federal Register, whichever is later. Why This Matters How the Rules Would Apply Additional Information: