SEC Chairman William Donaldson today said the commission is "in the final stages" of deliberations over Regulation NMS, which could dramatically restructure U.S. equity markets. In testimony before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, Mr. Donaldson appeared to favor the SEC's proposed trade-through rule, which would protect stock market orders entered electronically from being traded at an inferior price. The trade-through proposal is one of the most controversial pieces of the Regulation NMS proposal, generating more than 1,500 letters.
"I want to emphasize that the trade-through rule that the commission has proposed is pro-competitive — in the best tradition of the market-reform initiatives that the commission has spearheaded over the last several years," he said in prepared testimony. He also said the proposal to extend the trade-through rule to the Nasdaq market could be beneficial to investors.
Mr. Donaldson emphasized that the commission has not reached a final judgment on Regulation NMS.