Nyse calls for SEC to postpone Reg NMS regulations

Nyse calls for SEC to postpone Reg NMS regulations

The New York Stock Exchange has called for the US Securities and Exchange Commission to postpone the implementation date of the Regulation NMS trading rules from February to March so as to coincide with the roll-out of a new round of trading system upgrades.

Nyse - which is the largest stock US exchange - has written to the SEC requesting the regulator postpone the implementation of the new regulations to 5 March 2007 from 5 February so that it can better prepare its systems for the new trading rules, which are designed to make stock trading faster and mandates brokers to execute trades at the best price.

The Exchange has been rolling out its hybrid trading system - which combines fast on-screen dealing systems with traditional floor-based market-making - for the past year.

In its letter, the Exchange says delays in the roll out of its system mean it will be unable to meet the "automated quotation" mandates under the new rules.

Nyse would be considered too slow on some transactions and would be unable to automatically execute stock trades and it would have to shut off automatic execution.

Requiring the Exchange to take away automatic execution and routing because it is temporarily unable meet the new rules would jeopardise best execution for investors and the market as a whole, the Nyse says.

Nyse expects the third phase of the roll out of its hybrid system to be completed by the end of February. The Exchange argues that rushing out the platform would put trading systems at unnecessary risk.

According to press reports the SEC is expected to allow the extension, since starting implementation of the new rules without the largest US stock exchange could disrupt trading.

The SEC postponed a previous compliance deadline in May last year.

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