Why is the SEC taking so long to release the final version of its controversial Reg NMS? The regulation, which promises the most radical shake-up of the US cash equities market structure since 1997, was narrowly approved by three votes to two on April 6. The SEC had previously said that the final version would be published within two weeks. It typically takes between just two and four weeks for final versions to be published once approved, but six weeks later, as Euromoney went to press, the securities industry is still anxiously waiting.
Behind the scenes at the Baruch College Nasdaq conference in New York on May 3, speculation was rife that the delay might be because the SEC had spotted significant contradictions in the rule as it stood that could cause confusion.
"The problem is they can't just change it because it would need to go out for consultation again," explains an industry source who claims inside knowledge.
A number of analysts agree that the current rule leaves much unclear and that there might be contradictions.
"There is an apparent contradiction between best-execution requirements and Reg NMS's order protection rule," says Jodi Burns, an analyst at financial services technology consultancy Celent.