Optimizing Markets for Today and Tomorrow

A Framework for U.S. Equities Market Reform

Building upon our 2019 TotalMarkets blueprint, Nasdaq has launched a framework for optimizing U.S. equities markets for the future. As the operator of many of the world’s largest and most innovative securities exchanges and a leading provider of technology to markets and market participants globally, Nasdaq believes in transparent, fair, efficient, competitive and inclusive markets, and we support regulatory changes that advance those critical goals.

Enhance Equity Market Structure

Improve Best Execution

Improve Best Execution to better balance the desire for a strong NBBO and ample flexibility to ensure investors’ trading objectives are met

Promote Competition and Regulatory Parity

Promote competition and regulatory parity among market centers to drive innovation and customer choice and support balance between lit and dark trading

Strengthen the National Best Bid and Offer

Ensure the markets remain transparent, robust and resilient via a deep and liquid NBBO

Our Recommendations for

Optimizing U.S. Equities Markets

  • Harmonize Trade and Quote Ticks

    Promote competition and transparency by harmonizing minimum quoting and trading increments across all markets

  • Incorporate Intelligent Ticks

    Strengthen the NBBO through intelligent ticks, especially for lower-priced “tick-constrained” stocks

  • Adjust access fee caps and rebates

    In conjunction with tick reform, adjust access fee caps and rebates commensurately to promote competition and transparency.

  • Enhance accessibility for IOIs

    Bolster the NBBO by clarifying that actionable Indications of Interest (”IOIs”) are quotes that should be broadly available to the public

  • Clarify Best Execution

    Provide guidance on sourcing inter-NBBO liquidity and meaningful price improvement

  • Modernize reporting and disclosure regime

    Modernize the reporting and disclosure regime for execution quality statistics to improve transparency

  • Level the playing field

    Level the playing field by granting exchanges greater flexibility to offer purpose-built solutions to compete more effectively for all types of order flow from all trading segments

  • Increase transparency of off-exchange trading

    Increase the level of transparency of off-exchange trading to improve investors’ ability to source liquidity and measure performance

  • Modify SIP Revenue Formula

    Recalibrate the consolidated market data revenue allocation formula to promote price discovery and strengthen the NBBO

  • Eliminate Odd & Round Lot Concepts

    Eliminate the antiquated concepts of “round lots and odd lots” to promote efficiency and transparency

  • Preserve Incentives for Good

    Preserve exchange rebates and other “incentives for good” that promote transparency, liquidity and a stronger NBBO

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Making the Case for Market Structure Reform