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SEC delays best-price rule on stock trades to March 5

WASHINGTON -- The Securities and Exchange Commission approved a request by NYSE Group Inc. to delay by a month the implementation of rules guaranteeing that investors' trades get completed at the best price.

The regulator granted the NYSE's request to require exchanges to start complying with the rule on March 5 instead of Feb. 5, according to a notice posted on the regulator's Web site yesterday. The commission also pushed back the deadline to Aug. 20 from July 9 for exchanges and all brokerages to handle trading in 250 stocks under the new rules. The final deadline covering all stocks remains unchanged at Oct. 8.

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The NYSE, the largest U.S. stock exchange, had asked for the delay to gain more time to test its trading systems. Regulation National Market System, or Reg NMS, requires that trades be completed at the best price available for electronic execution on any exchange.

"The commission agrees that implementing Reg NMS without full participation by a major market such as the NYSE would jeopardize the smooth functioning of the U.S. equity market," the SEC said.

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Regulators want exchanges and brokers to route trades to the market that has the best price as investors increasingly rely on automated transactions. The rule states that that an order setting the best price at one exchange can't be ignored, or "traded through," on another market with orders at less favorable prices.

The Chicago Board Options Exchange said in a statement yesterday that it would postpone the launch of its stock market to coincide with the new deadline. The exchange, the largest U.S. options market, was planning to expand its equity trading system to handle about 2,800 stocks listed on rival markets.


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