In a recent government meeting, discussions centered around the U.S. Securities and Exchange Commission's (SEC) proposed revisions to the equity market structure, particularly the introduction of a new best execution rule. This proposal has raised concerns among industry experts regarding its necessity and potential impact on market participants and retail investors.

At the end of December 2022, the SEC released four significant revisions, but critics argue that these rules were considered in isolation, lacking meaningful feedback from market participants. The proposed best execution rule, which would add another layer of standards on top of existing regulations enforced by the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB), has been particularly contentious. Experts, including Mister Rubenstein, questioned the rationale behind the SEC's move, suggesting that existing frameworks are already sufficient and that the SEC could address any identified issues directly with the self-regulatory organizations rather than introducing potentially overlapping regulations.

Professor Broegard echoed these sentiments, noting that the current standards have been in place for decades and that there has been no widespread concern regarding gaps in enforcement. He criticized the SEC for not engaging robustly with market participants, which he believes is essential given the substantial nature of the proposed changes.

Mister Kennedy highlighted the stakes involved for retail investors, warning that failure to carefully consider these proposals could lead to widening spreads in the market. He emphasized that such changes could ultimately harm investors by increasing the costs they face when trading.

Overall, the meeting underscored a growing apprehension within the financial community about the SEC's approach to reforming market structure, with calls for more thorough analysis and stakeholder engagement before implementing significant regulatory changes.