SEC proposes scrapping trade-through rule that forces best-price routing. Canada delays its inter-listed changes and weighs response. 60-day comment period open.
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The U.S. Securities and Exchange Commission wants to scrap the rule that forces brokers to route orders to the exchange showing the best price. The proposal, released earlier this month, opens a 60-day comment period. It puts Canadian regulators in a waiting pattern.
The SEC also pushed back planned changes to tick sizes and access fee caps to Nov. 1, 2027, giving the U.S. industry more time to adapt. The Canadian Securities Administrators and the Canadian Investment Regulatory Organization said they will delay their own changes for inter-listed securities to match that date. The CSA said it will consider any necessary action in response to the SEC's order protection proposal.
The order protection rule – known as Regulation NMS in the U.S. and a similar regime in Canada – was designed to prevent trades from executing at inferior prices. Critics argue it has encouraged market fragmentation by splitting order flow across dozens of venues. It also pushed a large share of equity volume into dark pools, where orders are hidden. The SEC cited dark execution as a concern in its consultation.
If the U.S. drops trade-through protection, brokers would decide where to send orders, subject only to their best execution obligations. That gives them more discretion but also more responsibility. For Canadian markets, the stakes are highest for inter-listed securities – stocks that trade on both U.S. and Canadian exchanges. A divergence in rules could create conflicting obligations for brokers handling cross-border orders. If Canada keeps its rule while the U.S. drops its, a broker routing a dual-listed stock might face different standards in each market.
The CSA said any change to Canada's order protection requirements would still have to go through the normal rulemaking process. That means a public consultation and a comment period of its own, likely months away.
The SEC's comment period ends 60 days from the publication date. Canadian regulators have not set a timeline for their own review. The immediate catalyst for the next move is the close of that U.S. comment period and any signal from the SEC on whether it will proceed with the proposal.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.