| WASHINGTON, March 23
WASHINGTON, March 23 The acting head of the U.S.
Securities and Exchange Commission has directed the regulator to
launch a pilot plan that would test how the market would be
affected if exchanges lowered the fees they charge brokers to
Michael Piwowar, who is acting chairman while President
Donald Trump's appointee for the post Jay Clayton awaits
confirmation by the U.S. Senate, announced the plan in a speech
at Columbia University in New York City. Piwowar said he thinks
it will be better for the SEC's staff to set parameters for the
pilot, as opposed to letting the exchanges design it.
"I have come to believe that the SEC rulemaking process
would be more appropriate for such an important undertaking as
the access fee pilot," said Piwowar in his prepared remarks.
Brokers have long complained that fees the exchanges charge
are too high. They say this is one reason that many trades are
executed on "dark pools," alternative trading platforms that
compete with exchanges and offer less price transparency.
A pilot program driven by SEC rulemaking "would certainly
be more labor intensive to initiate," he said, but "would avoid
the inevitable struggles between market participants, each with
its own point of view informed by its own business model."
"Access fees" are the fees that exchanges charge brokers for
executing trades. Currently, every 100 shares that are executed
on an exchange cost a broker 30 cents.
An SEC advisory panel had urged the commission to launch a
test to see how lowering the fees might affect the marketplace.
Such a test can be designed by exchanges and submitted for
approval, or the SEC can opt to structure it on its own through
a formal rulemaking process, which Piwowar prefers.
"The time for an updated special study of securities
markets is now," Piwowar said.
In Washington on Thursday, Clayton, the Wall Street attorney
Trump has chosen to lead the SEC, defended himself against
Democrats' charges that multiple conflicts of interest would
force him to miss too many SEC votes.
Clayton is expected to win confirmation easily, although
some Democrats on the Senate Banking Committee raised concerns
about his ties to Wall Street and Goldman Sachs, a bank
he represented during the financial crisis and where his wife,
(Reporting by Sarah N. Lynch; Editing by David Gregorio)