ASA sends support letter ahead of hearing on oversight of America’s stock exchanges.
WASHINGTON – The American Securities Association (ASA) today sent a letter commending the Financial Services Committee for prioritizing legislation that would promote competition in our nation’s equity markets and further the interests of retail investors.
“Today’s regulations embrace a one-size-fits-all market structure that has contributed to a decrease in initial public offerings and created incentives that unfairly benefit statutorily protected exchanges,” ASA CEO Chris Iacovella said. “U.S. law should not allow anyone to exercise monopoly power over investors, and we applaud the Committee for shining a light on this misuse of the law.”
In the letter, ASA outlined recommendations to make America’s equity markets more transparent and competitive, and called on the SEC to scrutinize payment for order flow (PFOF) arrangements. ASA also expressed its support for the following bills slated to be discussed at today’s hearing: H.R.__ to amend the Securities Exchange Act of 1934 to add certain requirements for the filing and approval of proposed rule changes by self-regulatory organizations
This bill would require that exchange self-regulatory organization (SRO) rule filings go through a more transparent and accountable process before they can be adopted. Currently, exchange SRO rule filings are a perfunctory exercise that receives little oversight from the SEC. This would bolster the exchange SRO rulemaking process and ensure that rules are subjected to proper due diligence.
H.R.__ the “Securities Exchange Reform Act of 2022”
This bill would bring necessary reform to the immunity protections currently enjoyed by national exchanges. Additionally, the bill would give brokers and SEC-registered investment advisers a greater voice in the governance of Regulation NMS (Reg NMS) plans.
H.R. 5795, the “Main Street Growth Act”
This bill would create the legal framework for the registration and regulation of venture exchanges for the trading of EGC and small issuer shares. ASA has long supported this bill as we believe it is a necessary alternative to the existing one-size-fits-all market structure regime.
H.R. __, to amend the Securities Exchange Act of 1934 to require the Securities and Exchange Commission to promulgate a rule prohibiting or limiting the use of tiered rebate payments by national securities exchanges.
This bill would ensure that the SEC conducts a rulemaking to reform the existing PFOF system which has created harmful incentives amongst exchanges and other market participants. Reforming wholesale and exchange PFOF would ultimately benefit retail investors and those who have their capital at risk in the equity markets.
To read ASA’s full letter to the Committee, click here.
ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.