May 5, 2015 / 6:00 PM / 4 years ago

Wall Street group backs BATS exchange's U.S. market reform proposal

NEW YORK, May 5 (Reuters) - A Wall Street trade group on Tuesday threw its support behind a proposal for regulatory reform of the U.S. stock market that exchange operator BATS Global Markets suggested earlier this year, including slashing exchange fees.

The proposal would reduce complexity while making the markets more transparent and fair, the Securities Industry and Financial Markets Association (SIFMA), said in a letter to the U.S. Securities and Exchange Commission.

The proposal from BATS, the No. 2 U.S. exchange operator, also called for more disclosure to investors about how their stock orders are dealt with, and for allowing brokers to decide if they want to connect to exchanges that have less than 1 percent of overall market volume.

The U.S. stock market is viewed as the deepest and most efficient in the world, but it has been more than a decade since the rules governing it were put in place and calls for reforms have been wide-spread since the May 2010 “flash crash” in which the Dow Jones industrial average briefly plunged 700 points.

SIFMA, which lobbies on behalf of broker-dealers, banks and asset managers, sent the SEC a list of recommendations similar to the BATS proposal in July.

The main difference was that SIFMA called for exchange fees to be lowered for the trading of all U.S. stocks, whereas BATS called for lower fees only for the 200 most actively traded stocks. The exchange said that move could lead to market-wide savings of more than $850 million annually. (Reporting by John McCrank; Editing by Cynthia Osterman)

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