SEC Proposes Abolishing Best Price Rule, Sparking Strong Investor Opposition
Nashnova编辑部
The SEC proposed abolishing the nearly two-decade-old trade-through rule that forces brokers to find investors the best available price, drawing over 900 opposing comments — a fight that will test how far the agency's deregulation agenda can go.
What does the best-price rule actually protect?
The trade-through rule does one thing: when you buy a stock, the system must route your order to whichever exchange offers the lowest price.
Example: General Motors is quoted at $80 on one exchange and $79.99 on another. The rule forces your order to the cheaper venue.
In plain terms = it is a mandatory price-comparison engine, saving investors every last cent.
Why does the SEC want to kill it now?
SEC Chair Paul Atkins argues scrapping the rule would "simplify market structure and reduce costs for market participants."
He points to a side effect: since the rule took effect in 2005, U.S. stock exchanges have grown from 8 to 18 — most with market share below 1%.
This means → brokers must buy data feeds from every exchange to stay compliant, and compliance cost itself has become the burden.
Atkins voted against the rule as a commissioner back in 2005 — this push is a long-held position, not a new idea.
How strong is the opposition?
Over 900 comment letters poured into the SEC before the deadline, from individual investors, pension funds, and major asset managers.
AIMA — the hedge-fund trade group whose members manage over $4.5 trillion — said the proposal "has not adequately demonstrated that benefits exceed risks."
Electronic-trading giant Citadel Securities also opposes the move. Retail group We the Investors, formed after the 2021 GameStop saga, organized a mass letter campaign accusing the SEC of "effectively working against investors."
Who supports scrapping it — and what do they really want?
Support comes mainly from the crypto industry. Robinhood argued the rule's "costs in forced connectivity, exchange proliferation, and complexity now exceed its benefits."
Blockchain lobby group Solana Policy Institute was blunter: the rule is "blocking the development of on-chain finance and tokenized securities."
This means → crypto's real goal is clearing the path for tokenized stocks — blockchain-based equity products enabling round-the-clock trading and instant settlement. Killing the rule is step one.
How is this fight likely to end?
The SEC faced a similar wave of tens of thousands of opposing comments on another Trump-era proposal — switching corporate earnings reports from quarterly to semi-annual. According to the Wall Street Journal, the agency is expected to press ahead regardless.
This reflects a pattern: under Atkins, the SEC is systematically loosening its regulatory framework. Opposition volume alone may not change the outcome.
In plain terms = the best-price rule's fate is a litmus test for this SEC's reform resolve — and so far, the odds that investor pushback will alter the course do not look strong.
Content is for reference only, not financial advice.