ICI Comment Letter on the SEC’s Tick Size and Access Fee Reduction Proposal

The Investment Company Institute (ICI) is writing to respond to the Securities and Exchange Commission’s (SEC or “Commission”) rule proposal (“Proposal”) to amend Regulation National Market System (“Regulation NMS”) to establish variable minimum pricing increments (“tick sizes”) for the quoting and trading of NMS stocks under Rule 612, reduce the existing access fee cap under Rule 610, and accelerate the inclusion of new round lot sizes and odd lot quote information into SIP core data via amendments to Rule 600, some elements of which the Commission previously adopted in its market data infrastructure (MDI) rule in 2020.  The Commission states that the Proposal would update Regulation NMS to better reflect today’s equity trading environment and fulfill the statutory objectives of promoting efficient, competitive, fair and orderly markets under section 11A of the Securities Exchange Act of 1934 (“Exchange Act”).

We support changes to the Regulation NMS framework that reflect developments in the US equity markets and address new issues that may impact their fair and orderly operation. In this instance, however, we strongly caution against trying to adopt all the Proposal’s extensive and complex market structure changes simultaneously or within a short time.

Read more in the comment letter.