Schwab Statement Regarding Consensus Response on Market Structure

March 6, 2023

Charles Schwab & Co., NYSE Group, Inc., and Citadel Securities have different business models, client interests, and perspectives, but we have found common ground on several productive improvements within the Securities & Exchange Commission market structure proposals and have submitted our consensus view to the Commission for their consideration.  

In our consensus response, we recommend a series of sensible, beneficial improvements in the areas of Minimum Price Increment and Order Execution Information, two of the SEC’s target areas for structural change. We collectively recommend against two other areas of restructuring, due to the potential risks involved. We believe, with the SEC’s participation, this commonsense approach could be a model for a productive path forward for the industry regarding market structure.

The current U.S. approach to market structure provides investors with the best outcomes in the world. Any proposed overhaul to that system should be thoroughly vetted and thoughtfully implemented to ensure the expected benefits are likely to materialize and would outweigh the risk to degrading investors’ experience or outcomes. We also believe any path forward is best served by regulators working with industry participants to understand the real impact changes may have.

We support improvements that benefit investors. The SEC’s multiple proposals to overhaul the U.S. markets, however, call for the agency to simultaneously implement four different sets of structural changes, without a clear understanding of the consequences each proposal will have on the other proposals – or on investors. However well-intentioned it may be, we believe this creates a significant risk to American investors and the high-quality, low-cost market they rely on today.

Schwab is continuing its thorough review of the four proposals and their likely impact on clients and will offer additional comments for the Commission’s consideration in the near future.