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Top Exchanges Rally Against SEC Transaction Fee Pilot

Comment letters from Nasdaq and CBOE harshly criticize the SEC’s proposal to implement a two-year pilot program to review pricing and rebate models and how they influence brokers’ trade routing decisions. The program, proposed in March, would subject stock exchange transaction fee pricing, including “maker-taker” fee-and-rebate pricing models, to temporary pricing restrictions across three test groups, and require the exchanges to prepare and publicly post data.Both exchanges’ comment letters say the pilot program is unnecessary and could harm instead of help investors and dispute the SEC’s legal authority to implement the program, suggesting the exchanges may sue if the SEC adopts the proposal.