SEC comment

Release No. 34-43084 File No. S7-16-00 Public Interest Comment on The Securities and Exchange Commission’s Request for Comment on 1DISCLOSURE OF ORDER ROUTING AND EXECUTION PRACTICES The Regulatory Studies Program (RSP) of the Mercatus Center at George Mason University is dedicated to advancing knowledge of the impact of regulation on society. As part of its mission, RSP employs contemporary economic scholarship to assess rulemaking proposals from the perspective of the public interest. Thus, our response to the Securities and Exchange Commission’s request for comment on the proposed rules for disclosure of order routing and execution practices do not represent the views of any particular affected party or special interest group, but are designed to evaluate the effect of the Commission’s proposals on overall consumer welfare. The Securities and Exchange Commission (SEC) has proposed two new rules that require market centers and broker-dealers to disclose execution and order routing practices. While the rules are intended to promote competition among broker-dealers and market centers, the context and implication of the SEC proposals may lead to greater concentration of trading interest among established broker-dealers and market centers. By tacitly discouraging investors from using markets or hiring agents that employ trading practices alleged to contribute to market fragmentation, the SEC’s proposal to require disclosure of order-routing ...