US SEC set to propose limits on brokerage trading rebates

At a public meeting in Washington, the five-member U.S. Securities and Exchange Commission is scheduled to vote on a proposal that would ban stock exchanges from offering lower transaction prices and rebates to brokerages with higher trading volumes, something officials said creates unfair competitive advantages for larger firms. The number and complexity of pricing tiers that can exist among exchanges, and which leave different brokerages facing sizeable differences in cost, can make price schemes complex and difficult to understand, officials said in advance of the meeting. Ending such pricing advantages will also help prevent conflicts of interest in which brokerages may route orders for execution in ways that benefit the brokerage but not the client, according to the SEC.