#USHouseMarketStructureDraft

The draft bill seeks to modernize and simplify financial‑market regulation by updating trading‑venue rules, strengthening investor protections, and enhancing transparency. Its core aims are to ensure fair competition among exchanges, curb abusive high‑frequency trading practices, and improve oversight of off‑exchange trading venues.

Key Proposals

1. Consolidated Audit Trail (CAT) Expansion

Mandates real‑time reporting from all trading venues (exchanges, dark pools, ATSs) to a single audit database .

2. Order Protection Rule Update

Extends best‑execution obligations beyond lit exchanges to include all alternative trading systems (ATSs) .

3. Tick‑Size and Fee Structure Reform

Grants SEC authority to adjust minimum tick‑sizes on less‑liquid stocks to foster liquidity .

4. HFT Controls

Introduces minimum resting times for limit orders and enhanced “kill switch” requirements for algorithmic traders .

Background & Rationale

Fragmentation concerns: U.S. equity trading is spread across 15+ venues, diluting price discovery and complicating best execution .

Flash events: Past “flash crashes” exposed vulnerabilities in current market‑structure rules .

Next Steps

Committee Markup: Draft to be debated in the House Financial Services Committee in June 2025.

Stakeholder Feedback: SEC to solicit comments from exchanges, broker‑dealers, and investor groups.

Implementation Timeline: If passed, phased roll‑out over 18 months with periodic SEC reviews.