SEC Regulation NMS sparks more controversy in the industry
Technological advancements in trading on the securities exchanges have created a theater in which the investment system has outgrown some of the rules that govern it - and trade-throughs are at center stage. Long acknowledged as a controversial topic in the industry, trade-throughs have gained attention by the Securities and Exchange Commission (SEC) and garnered controversial regulation.
Problems arise when investors "trade through" a superior price on a "slow" exchange in favor of a less favorable, but immediately available, quote on another "fast" exchange. Fast exchanges, which include electronic communications networks (ECNs), such as ArcaEx, a subsidiary of Chicago-based Archipelago Holdings, receive and execute trades automatically via computer. By comparison, slow exchanges, such as the New York Stock Exchange (NYSE), route orders to floor specialists - individuals maintaining inventories of specific exchange-traded stocks - who, in the past, have taken up to one minute to execute a trade, and often at a price that differs from the quote displayed.
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