Good News...... Banker http://securitiesindustry.com/midweek.cfm?article=997 SEC Approves Nasdaq The Securities and Exchange Commission has approved a Nasdaq proposal to cap ECN fees on SuperMontage at $3 per 1,000 shares and to rank ECN quotes on par with market makers', according to a source close to regulators. "The SEC has approved Nasdaqâs proposed ECN fee cap," the source told Securities Industry News. A Nasdaq executive said his market has been hopeful the SEC would favorably consider its filing since it submitted it last fall. The proposal had drawn essentially positive comments from the industry, as most ECNs quoting on SuperMontage already charge $3 or less per 1,000 shares. The most important part of the filing involves streamlining SuperMontage operations. Treating quotes by ECNs and market makers equally would make it possible for Nasdaq to eliminate two of three priorities on SuperMontage--price-time with ECN fees and price-size--and keep only price-time. The rule change approval is the final chapter in a long, drawn-out battle between Nasdaq and the ECNs. The debate about how to handle ECN orders started in 1999 with the initial SuperMontage proposal that gave market makers' "fee-free" orders priority over ECNs' quotes. The fee cap would prevent hefty rebates used to attract business. The high-fee, high-rebate model has also created a financial incentive to "lock" markets, or when the bid and ask price match. Many regulators regard the practice as unhealthy because it distorts price information. Separately, the SEC is expected to soon release four rule change proposals involving major market structure issues. One of them would deal with access fees and seek to have all broker-dealers, whether ECNs or market makers, provide equal access to markets.