The Securities and Exchange Commission has released a notice regarding a proposed rule change by MEMX LLC. The change involves amending a rule to allow MEMX to handle limit orders even when the national best bid or offer (NBBO) is not available, arguing that this will enhance market liquidity and benefit members by enabling the submission of orders that could help establish the NBBO. Unlike market orders, limit orders have a specific price limit set by the user, minimizing the risk of unintended prices due to NBBO unavailability. The Commission has waived the usual delay for the proposal to become operative, allowing it to take immediate effect. Critics or supporters of this change can submit their comments to the Commission as outlined in the notice.
Simple Explanation
The SEC says that a company that helps people buy and sell stocks, called MEMX, wants to change a rule so it can handle special types of buying orders, called limit orders, even when the best price to buy or sell isn't clear. This change is aimed at helping the system work better and allowing more people to buy and sell shares at prices they choose.