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Access-fee caps could keep stock quotes from crossing
Under the proposal, traders would still have an economic reason to step in when prices mismatch across venues. The SEC says that can replace the old guardrails it wants to repeal.
In Washington, the Securities and Exchange Commission is proposing to rescind the trade-through rule for NMS, or National Market System, stocks, along with the rule that bars locked and crossed quotations. For investors, broker-dealers and market makers, the question is not just whether the old guardrails come off. It is what keeps stock prices from drifting apart once they do.
The agency’s answer is that crossed markets should not linger. It says the market itself, helped by access-fee caps, should give traders a reason to step in quickly and close the gap before a crossed quote becomes a lasting distortion.
A market that is supposed to heal itself
The SEC’s logic depends on arbitrage, the basic trading response to a price mismatch. If one venue is offering a stock cheaper than another, a trader can buy where it is lower and sell where it is higher, pushing the prices back together.
The commission says today’s faster, more automated equity markets make that corrective force work more quickly than it did when the rulebook was written. In that view, crossed markets are a temporary condition, not a normal state of play.
Access-fee caps are central to that theory because the SEC says they preserve the economic incentive for that arbitrage. If fees are capped, the agency argues, the opportunity to clean up a crossed market still exists and still pays enough to attract fast action.
The rules that would disappear
The proposal would unwind Rule 611, the trade-through rule that blocks orders from being executed at a worse price when a better one is available elsewhere. It would also remove the ban on locked and crossed quotes, which now keeps the best bid and best offer from meeting or overlapping.
That is a real change in how U.S. stock prices stay aligned across trading venues. The SEC is betting that the market can do the policing itself, and that the fee structure is enough to keep crossed markets short-lived rather than sticky.
For readers, the practical stakes are plain: the commission is relying less on a fixed prohibition and more on the market’s own incentive to correct itself.