The U.S. Securities and Exchange Commission proposed scrapping Rule 611 of Regulation NMS, known as the Order Protection Rule. Established in 2005, the mandate requires brokers to execute stock trades at the best available price across all exchanges.
SEC Chair Paul Atkins identifies the repeal as a long-term goal to modernize market structure. The regulator argues that technological advancements have rendered the 19-year-old rule obsolete. Officials claim the move will reduce compliance costs and eliminate unnecessary complexity for market participants.
Critics warn that removing the protection could allow brokers to prioritize secondary factors over the best execution price. The original rule aimed to prevent investors from receiving inferior prices by forcing orders to the venue with the best quote.