PTG Responds to Proposed Amendments to Regulation NMS
Aug 17, 2026
In a letter filed today with the Securities and Exchange Commission (SEC) PTG strongly supports the SEC’s proposal to rescind Regulation NMS Rule 611 (the trade-through rule) and Rule 610(e) (the prohibition on locked and crossed markets), arguing that these rules have contributed to excessive market fragmentation, exchange proliferation, complex order types, and significant connectivity, routing, and compliance costs. The letter contends that while Rule 611 originally promoted displayed liquidity and price competition, it also created regulatory incentives that enabled the growth of numerous exchanges that add limited trading value while generating market data and connectivity revenues. PTG believes rescission is an important step toward a simpler and more competitive market structure but cautions that many of the underlying incentives created by the current regulatory framework will remain unless related reforms are addressed simultaneously.
The letter urges the SEC to coordinate Rule 611’s rescission with broader market structure reforms. In particular, PTG argues that FINRA should modernize its best execution guidance before rescission becomes effective, so firms have a clear framework for routing decisions in a post-Rule 611 environment. PTG also raises concerns about preserving the integrity of the National Best Bid and Offer (NBBO), warning that eliminating the current definition of “automated quotation” could weaken standards governing quote accessibility and reliability. The organization recommends maintaining minimum accessibility standards for quotes that contribute to the NBBO and strengthening oversight of Alternative Display Facility (ADF) participants whose quotations may influence consolidated market data.
Finally, PTG argues that the SEC should address other interconnected issues as part of the same reform effort, particularly the SIP revenue allocation formula, which it believes continues to incentivize exchange proliferation regardless of Rule 611. The letter also recommends continued scrutiny of exchange fees, coordinated review of related rules governing access fees and tick sizes, prompt conforming amendments to exchange rules, and ongoing monitoring of off-exchange trading following rescission. PTG concludes that repeal of Rules 611 and 610(e) is warranted, but that the SEC should implement accompanying reforms to best execution guidance, NBBO protections, SIP revenue allocation, and market oversight to preserve the efficiency, transparency, and liquidity that have made U.S. equity markets the global benchmark.