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Two of the biggest U.S. stock-exchange operators have accused the Securities and Exchange Commission of exceeding its legal authority with a proposal to limit the rebates they pay traders to attract stock orders.
The attacks show that Nasdaq Inc. and Cboe Global Markets Inc. may sue the SEC to block the proposal, called the Transaction Fee Pilot, some observers said. Representatives of Nasdaq and Cboe declined to comment when asked if they plan to pursue legal action.
The two-year pilot program, which the SEC proposed in March, has riled big U.S. exchanges because it would undermine a key part of their businesses: a widely used system of fees and rebates called “maker taker,” in which exchanges pay rebates for some orders and charge fees for others.
The pilot is effectively an experiment to see how weakening or eliminating maker taker for some stocks, while leaving others untouched, will affect the U.S. stock market.
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