Republican legislators oppose proposed equity market structure revisions

A group of lawmakers recently forwarded correspondence to the Securities and Exchange Commission (SEC), citing opposition to several proposed domestic equity market structure revisions.

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U.S. Sens. Kevin Cramer (R-ND), Bill Hagerty (R-TN), Thom Tillis (R-NC), Mike Crapo (R-ID), and Cynthia Lummis (R-WY) signed off on the letter to SEC Chair Gary Gensler.

“U.S. equity markets facilitate a dynamic American economy and allow the average American working family to achieve their long-held financial goals, such as buying a house, sending their children to college, and retiring with economic security,” the legislators wrote. “As such, we agree with the SEC’s October 2021 report on equity market structure conditions, which noted that the widespread adoption of innovative technology and digital platforms by broker-dealers and investment advisers has made investing and trading in securities more accessible to a broader range of individuals than ever before.”

The lawmakers expressed concerns regarding the SEC advancing proposals the lawmakers maintain would discourage competition and innovation that has revolutionized markets and benefitted investors.

“Given the potential impact of these rules, the unprecedented lack of input from stakeholders is alarming,” the legislators concluded. “Previous wholesale market structure reforms were conducted with extensive outreach prior to formal rulemaking.”

According to lawmakers, Regulation NMS, which they noted shapes much of the modern market structure, was formally proposed after months of public engagement, public/private dialogue, concept releases, and stakeholder feedback. After proposals were released, the SEC continued public engagement and a subsequent follow-on comment period after the engagement.