Recent technological and regulatory changes have brought about dramatic changes in the structure, conduct and performance of the securities industry in the USA and elsewhere. Trading venues such as ECNs, CNs and other ATSs compete head to head with the traditional exchanges. The SEC has recently adopted the so-called Reg NMS regulation whose major thrust is the order-protection rule. The latter makes regulation symmetric and provides a fairer level of competition. In anticipation of this regulation, the US industry has entered into a profound restructuring. The emerging industry structure, although oligopolistic, is more competitive. Reg NMS is thus a Pareto improving policy.
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