Wire
Broker-dealers could cut costs under SEC market rewrite
The proposal would scrap the trade-through rule and the ban on locked or crossed quotes, then force firms to update systems and routing practices. The SEC puts the first-year implementation bill at $40.9 million.
In Washington, the Securities and Exchange Commission is proposing to pull back two of the rules that help govern how NMS, or National Market System, stocks are routed and quoted across exchanges. The agency says eliminating the trade-through rule and the ban on locked or crossed quotations would not just simplify the market structure. It would also save money, with estimated annual cost savings of $22.8 million to $45.6 million.
The SEC’s own accounting says the first year would not be free. It estimates $40.9 million in one-time implementation costs as broker-dealers, market makers and exchanges update systems, routing logic and quoting practices to fit the new rules.
The price of tearing out the guardrails
The commission is framing the proposal as a deregulatory tradeoff with a measurable payoff. It puts annual monetized benefits at roughly $54.2 million to $77.0 million, which is the agency’s way of saying the recurring gains should exceed the annual costs once the market adjusts.
That matters because the firms caught in the middle would have to change how orders move and how quotes interact, while the SEC argues the old guardrails now do more to add friction than to improve trading. The proposal also would remove certain defined terms and make conforming changes to related provisions, a sign that this is meant to be more than a narrow cleanup.
Who would pick up the bill
The upfront burden would land on the firms that keep the market plumbing running. Broker-dealers, market makers and exchange operators would have to rework systems and procedures that were built around rules the SEC wants to unwind.
For investors, the practical question is whether lower compliance and routing costs eventually show up in a market that is easier and cheaper to operate, without making price protection harder to understand. The agency is betting that the recurring savings outweigh the one-time shock of changing course.
The public comment window
Comments on the proposal are due Aug. 17, 2026. After that, the SEC will have to decide whether its cost-benefit math is strong enough to justify rewriting the rules that have shaped stock routing for years.