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Top exchanges sue SEC over transaction fee plan

Joe Mont | February 28, 2019

With a demonstration of solidarity, three of the nation’s largest stock exchange operators are suing the Securities and Exchange Commission in an effort to halt recent rulemaking they say will put them at a competitive disadvantage.

Intercontinental Exchange’s NYSE, Nasdaq, and Cboe Global Markets operate 13 of the 14 U.S. stock exchanges. The crux of their discontent is a pilot program the SEC approved in December. It will limit what certain exchanges can charge for executing trades and similarly place limits on the rebates exchanges often pay brokers. The SEC says these rebate payments, which amount to roughly $2.5 billion annually, may create conflicts of interest by paying brokers for bringing customer orders to whatever exchange pays the most over what may be best, or most suitable, for their clients.

On Dec. 19, the SEC voted to adopt the new Rule 610T of Regulation NMS, authorizing a Transaction...

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