The SEC study did not identify the firms that were refusing to accept the payments. But it noted that while virtually all the brokerage firms said they tried to send orders to the best markets, the firms that took payments tended to choose markets that were different from the ones that did not have an economic stake in where the order was sent.

The commission found that from November 1999 through September 2000 the options specialists paid $33 million to retail brokerage firms for directing their orders, with one brokerage firm collecting $6 million and six others getting more than $2 million each. None of the large recipients passed those payments on to customers, either through reduced commissions or rebates.

"In fact," the report said, "only one firm has significantly reduced retail commissions for executing listed options orders, and another maintains a policy to rebate payments received for order flow to customers."

But while the payment for order flow has clearly made money for brokerage firms, it seems likely that the cost has been borne not by customers but by the exchanges themselves, who may be achieving lower spreads. Theoretically, this indeed ought to be the result of introducing more competition into the market.

The SEC measured such spreads three ways. By the first measure, the quoted spread, it appears that spreads fell when competition began, but have since risen back to the previous levels. Another measure, called the realized spread, compares the price a customer gets with the price at a later point in time, thus taking into effect the informational value of a customers' trade, and shows the same result.

But by the third measure, the effective spread, which simply measures the difference between prices of actual customer buys and sells, the spread fell after competition came in and has remained around the lower level ever since. By that measure, which may be the best one, it appears that the costs of payments to brokers are being borne by the specialists, not passed on to customers in higher trading costs.

"The ultimate effect on investors remains to be seen," said Arthur Levitt, the SEC chairman, in an interview yesterday. "The case for continued vigilance is clear."