Some of the biggest names in Wall Street trading are urging the U.S. Securities and Exchange Commission to pull back on plans to overhaul rules for the stock market.
The New York Stock Exchange, Citadel Securities and Charles Schwab & Co. on Monday warned that a suite of proposals the SEC released in December could harm investors. The new regulations, if finalized, could damp liquidity in the market, the firms said.
"We are deeply concerned that the commission has simultaneously issued multiple far-reaching proposals that would dramatically overhaul current market structure without adequately assessing the cumulative impact on the market or the potential for unintended consequences," the companies said in a letter obtained by Bloomberg News.
The SEC "benefits from robust engagement from the public and will review all comments submitted during the open comment period," the agency said in a statement. "Generally, we respond to comments received as part of the final rulemaking and not beforehand."
The SEC released four proposals on Dec. 14 that Chair Gary Gensler has said would boost transparency and competition. They are a cornerstone of his rulemaking agenda and delve into the guts of how the market works, affecting everything from order routing to pricing and disclosures that brokers must make to clients.
In their letter, NYSE, Citadel Securities and Schwab urged the regulator to take a more deliberative approach to changes.
They recommended that the SEC set minimum quoting increments to a half-penny for some stocks and to harmonize trading increments for all symbols trading at or above $1 a share.
