It’s been one year since MEMX submitted its tick size exemption request to the Securities and Exchange Commission (“SEC”).
As outlined in that request, as well as a supporting white paper, 50% of U.S. equity volume is transacted in “tick constrained” NMS Stocks that could trade more efficiently with a half penny increment.
In the year since, we’ve continued to examine this issue, publishing a supplemental white paper in January. And, SEC Chair Gary Gensler has also acknowledged the need to address tick constraints in the equity market, most recently in remarks at Piper Sandler’s Global Exchange Conference in June. While there are many different possible approaches to tick size reform, our proposed approach balances the need to reduce spreads in these securities with the various concerns raised by the SEC when it adopted Rule 612 of Regulation NMS (the “Sub-Penny Rule”), including many concerns that are of particular relevance for institutional investors.
In an effort to continue this important discussion, we’ve resubmitted our request along with the supplemental data that we’ve published since filing our initial request.