March 5, 2007
I have opposed Regulation NMS since it was first proposed -- several times in posts here. The Regulation restructures, in fundament ways, the interrelationships of the country's securities trading markets. The application of the final rule has been held up for several years. Now, in the teeth of a market correction, we are going to role out the new rules, rules that further tax the computer systems of markets by adding another layer or routing rules. Markets must route orders to each other to prevent "trade throughs." The NYSE sought the new rule to protect its market share and may find that it will backfire because its new "hybrid" computer system will not be as good as the computer systems of smaller and faster ECNs. This could be good.
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