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STA Files Comment Letter on Access Fee Pilot Proposal

Traders Magazine Online News, June 5, 2018

John D'Antona Jr.

The Security Traders Assciation's Chairman of the Board, Mike Rask of Hodges Capital submitted a comment letter to the Securities and Exchange Commission stating the trade group's support of the regulators proposed access fee pilot program. 

Traders Magaazine presents the letter here:


May 31, 2018

Mr. Brent J. Fields


U.S. Securities and Exchange Commission

100 F Street, NE Washington, DC 20549-1090

Re: Transaction Fee Pilot for NMS Stocks

Dear Mr. Fields:

STA1 welcomes the opportunity to offer comment on the Securities and Exchange Commission’s (“SEC” or the “Commission”) proposed Transaction Fee Pilot for NMS Securities (“Pilot”).

As the Commission states in the summary of the proposed rule: The purpose of the Pilot is to study the effects that transaction-based fees and rebates may have on, and the effects that changes to those fees and rebates may have on, order routing behavior, execution quality, and market quality more generally.

STA’s comments on issues related to market structure come from our roles as practitioners in the markets. STA’s diverse membership, as measured by geography and business models, and long history of interacting with the Commission offers a unique perspective on the Pilot which we hope will contribute favorably to any final decisions to enact it and if so, its final design.

Over the years, STA has established certain principles for rule-making which have been helpful in formulating opinions and input on matters relating to market structure. Those which influenced our comments and are applicable to the Pilot include:

STA is a trade organization founded in 1934 for individual professionals in the securities industry. STA is comprised of 26 Affiliate organizations with 4,200 individual professionals, most of who are engaged in the buying, selling and trading of securities. The STA is committed to promoting goodwill and fostering high standards of integrity in accord with the Association’s founding principle, Dictum Meum Pactum – “My Word is My Bond”

STA believes that changes to market structure should be based on empirical data. In the absence of such data, the conducting pilots is a prudent and effective approach STA believes that our markets are constantly evolving therefore retrospective reviews on existing rules is a responsible course of action and is in the best interests of investors.

STA believes conflicts of interest that are not mitigated or managed properly have the potential to cause harm to investor confidence. When conflicts exist, there is no one-size-fits-all approach to addressing them. Therefore, STA has recommended efficient monitoring of situations where a conflict exists and urges caution with allowing new conflicts into the market.2 STA recognizes that while bans or prohibitions on arrangements where parties are conflicted may have benefits, they can also sometimes result in additional costs for investors. Therefore, it is incumbent upon regulators to consider if investors would be better off if the conflict were removed or allowed to remain in place with policies to mitigate the conflict. In some cases, it may be more effective and efficient to increase disclosures or take other actions short of a ban on an activity.

Based on these guiding principles and input from our membership STA is pleased to provide remarks on transaction-based fees and rebates and the design of the proposed Pilot.

Remarks on the Pilot

a. Evolution of access fee

For more information on related topics, visit the following channels:

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