US SEC Unanimously Approves Proposal to Repeal Stock Market Order Protection Rule
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The SEC voted unanimously to propose abolishing the trade-through rule — the requirement that stock trades execute at the best available price — calling it a cost and complexity drag. This is the most significant potential overhaul of core US equity-trading rules in decades.
What does this rule actually do?
The trade-through rule — part of 2005's Regulation NMS — requires brokers to route your order to whichever exchange offers the best price. They cannot "trade through" a better quote elsewhere.
In plain terms = when you buy a stock, your broker must find the cheapest ask across all exchanges, not just execute wherever is convenient.
The rule has governed US equity trading for nearly 20 years and is a structural pillar of the national market system.
Why does the SEC want it gone?
The SEC argues the rule raises trading costs and complexity and is no longer necessary in today's market.
SEC Chair Paul Atkins stated plainly: "I have opposed this rule since its inception." The commission currently has only three Republican members seated; the proposal passed unanimously.
This means → the Republican-led SEC is systematically dismantling post-crisis-era market regulation, and the trade-through rule is the latest piece.
What happens to the market if it's scrapped?
Supporters say removing the rule would cut compliance costs and make execution faster and more flexible.
Critics worry that once brokers are no longer forced to seek the best price, the result could be greater market fragmentation — order flow scatters, and retail investors may not end up with better prices.
This reflects a deeper regulatory tug-of-war: lower costs vs. price fairness. That tension will dominate the public comment period ahead.
Content is for reference only, not financial advice.