SEC set to vote on plan to end 'trade-through' ban next week

The SEC plans to vote next week on a proposal to fully roll back a 20-year-old trade-through ban that prevents exchanges, alternative trading systems and wholesalers from executing trades that ignore the national best bid or offer (NBBO). If approved, the change could materially alter execution plumbing — potentially boosting ATS/wholesaler activity and reducing NBBO protections, while pressuring exchanges’ trading revenues and affecting liquidity and spreads. The prospect already appears to have weighed on exchange-related names in the sidebar (NDAQ and ICE showed ~2% drops). Overall market impact is likely mixed: some market participants may gain execution flexibility and lower execution costs, while others (traditional exchanges, order-protection beneficiaries) could see revenue and liquidity fragmentation risks.