SEC To Ban Exchange Volume-Based Pricing Tiers

While the SEC meddling in industry pricing and other commercial matters is not a new phenomenon, a recent SEC proposal reflects an enhanced willingness by the agency to tightly grip the industry's purse strings (and a slow but steady regulatory creep that some would argue has degraded free enterprise). In taking this step, the agency has also pitted those exchanges that currently use volume-based pricing tiers against their members that historically have not been able to qualify for the most attractive pricing. This proposal also comes at a peculiar time, given that the SEC has separately proposed changes to minimum stock pricing increments, access fee caps, and best execution standards that could conflict with, if not wreak havoc on, exchange and member pricing and order routing decisions.