The New York Stock Exchange last week condemned proposals put forward by the Securities and Exchange Commission to open order books in the markets to investors.
In a formal comment on a proposal put forward by the securities regulator last month which would allow 'depth of book' bids and offers (which are usually only seen by trading floor specialists) to be shared between the markets, the NYSE suggested that such a move would "effectively transform our competing markets into a homogenized, government-mandated utility", adding that:
“Until now, the Commission has successfully maintained the important balance between order competition and market competition that the 1934 Act requires. However, mandatory DOB routing eliminates intermarket competition by requiring that markets route orders to any displayed limit order in any market center.”
The letter sent by the NYSE to the SEC added that this proposal would create a virtual consolidated limit-order book (CLOB), a concept that the SEC has rejected in the past and should do so again.
A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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