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Proposing an implementation path for the SEC’s market structure reforms


March 6, 2023

Lynn Martin

NYSE President

The New York Stock Exchange today, and throughout history, occupies a pivotal position as the world’s largest and most iconic platform for capital raising and trading. We do not take our responsibility at the intersection of the listing, trading and regulatory oversight of securities on our markets lightly. Our focus is always on continuing to improve the U.S. markets to ensure they remain the envy of the world.

In December, the U.S. Securities and Exchange Commission proposed a set of market structure reforms that are ambitious in scope and have, at their heart, goals that I believe we all share: modernizing the rules that govern our markets while maintaining their status as a shining example for the world financial community. That said, we need to carefully implement any changes to avoid an unintended set of circumstances that may do more harm than good.

To that end, we have worked with Citadel Securities, the U.S. equity markets’ largest market maker, and Charles Schwab & Co., the largest retail brokerage firm, to offer a thoughtful compromise that we believe will quickly achieve the SEC’s core policy objectives while reducing the risk of negative outcomes. Our proposal is outlined in a joint comment letter filed today with the SEC.

At a high level, we recommend pressing forward with two of the package’s four proposed rule changes and suggest withdrawing two of them until the impact of the initial changes is understood. The two proposals that we, as a group, would advocate pursuing (with some suggested modifications) are, first, the harmonization and tightening of pricing increments across all market centers and, second, strengthening disclosures on the execution quality of orders.

As market participants and the Commission consider the many viewpoints that will be offered during the comment period on this market structure reform package, I hope they will consider our joint recommendations as intended — in the spirit of compromise and collective progress — to ensure the “gold standard” status of our markets is maintained.