proposal to create a hybrid market is, among other things, incomprehensible, states Eric Roiter
, general counsel of Fidelity Investments
in a letter
to the SEC
Fidelity's August 10 letter also criticizes the NYSE's proposal on the grounds that much of the proposal is unexplained, imposes limits on "sweeps", and is opposed to the SEC's trade-through rule in Regulation NMS.
The NYSE proposed a system that would allow for more automated trading, but would still maintain a place for specialists.
"[T]he uncertainty surrounding when, and under what conditions, the NYSE can unilaterally cut off the ability of investors to obtain an automated sweep of the limited order book may be enough disincentive against sending automated orders to the NYSE. One important point, unclear in the NYSE’s filing, is this: Who can suspend automated executions?," writes Roiter.
The NYSE filed SR-NYSE-2004-05 in early August. Roiter proposes that the NYSE be required to refile the proposal with a "plain language" explanation of the proposal, specific examples, and additional detail.
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