SIFMA submitted the attached comments to the SEC regarding a proposed Nasdaq rule change to establish “benchmark orders” under NASDAQ Rule 4751(f). SIFMA urged the SEC to disapprove NASDAQ’s proposed rule change.
Lofchie Comment: This is actually a pretty interesting letter, as it argues that the order type proposed to be provided by Nasdaq is inherently a “broker-dealer” function rather than an “exchange” function. SIFMA argues, among other things, that if exchanges are performing broker-dealer functions, they ought not to benefit from limitations on their liability to others in the event of a problem. This was an issue of regulatory attention in connection with Nasdaq’s problems with the launch of Facebook, where dealers were limited in the amount that they were able to recover from Nasdaq.
View letter here (links externally to SIFMA website).