Press releases

MADISONVILLE, La. – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, joined Sen. Mike Rounds (R-S.D.) and all other Banking Committee Republicans in urging the Biden administration’s Securities and Exchange Commission (SEC) to withdraw its proposal to prohibit volume-based transaction pricing for National Market System (NMS) stocks. 

Volume-based pricing is a pricing method that decreases price per share of stock as the quantity of shares purchased increases. Volume-based pricing helps reduce costs for investors and promotes competition.

“Volume-based pricing is a long-standing practice that encourages a vibrant, competitive marketplace, benefiting a broad spectrum of market participants. Volume-based pricing is commonplace across various industries, promoting competition and rewarding entities for their contributions to the market. This practice has played a critical role in enhancing market liquidity, facilitating efficient price discovery, and maintaining the stability of financial markets,” the senators wrote.

“Despite these facts and without sufficient justification, the Proposal would explicitly prohibit volume-based pricing, suggesting it creates barriers for smaller brokers. However, these assumptions are inconsistent with the realities of existing market operations and competition. In fact, the Proposal’s adverse impact on smaller brokers and the broader broker-dealer ecosystem is likely to be significant. The Proposal would likely stifle smaller brokers’ competitive capabilities and result in market consolidation, reduced choice, and potentially increased costs for investors,” they continued.

“The Proposal’s overly simplified view fails to acknowledge the full extent of benefits that volume-based pricing brings to market dynamics and investors and ignores the superiority of market-based pricing mechanisms over central planning. Therefore, we request the Commission withdraw the rulemaking in order to preserve market liquidity and efficiency,” the senators concluded.

Sens. Tim Scott (R-S.C.), Mike Crapo (R-Idaho), Thom Tillis (R-N.C.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), J.D. Vance (R-Ohio), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.) and Steve Daines (R-Mont.) also signed the letter. 

The full letter is available here.