The US Securities and Exchange Commission has begun looking into whether the current multi-tiered pricing system used by stock exchanges favors large brokers and traders at the expense of small ones. In an effort to increase the volume of trading on an exchange, certain exchange operators (including New York Stock Exchange-owner Intercontinental Exchange Inc., Nasdaq Inc. and CBOE Global Markets) provide large brokers, banks and traders with rebates based on the amount of business they bring to the stock exchanges.

Critics have stated that the pricing method poses a disadvantage for smaller brokers, as they end up bearing significant costs, which ultimately makes it harder to compete against the larger brokers.

No formal investigation has been announced at this time, but should the SEC determine the pricing structure is inequitable, exchanges could be forced to modify their pricing models.

A more detailed discussion in an article published by Reuters is available here.