The New York Stock Exchanges’s "trade-through" rule is outdated and should be nixed, a Republican member of the U.S. House of Representatives wrote in a letter to SEC Chairman William Donaldson last week.

Richard Baker of Louisiana, who chairs the House Capital Markets Subcommittee, said that the trade-through rule should be changed because it enables floor specialists to monopolize any stock listed on the NYSE at the expense of electronic exchanges such as Instinet or Archipelago.

It was originally intended to ensure investors better deals by disallowing trades through one market versus another with higher prices. The SEC is scheduled to meet on Tuesday to discuss the trade-through rule in depth.

Baker’s subcommittee will hold a meeting Friday in New York to discuss the role of the NYSE specialists. In a statement promoting that meeting, Baker again stressed the importance of a non-monopolized system.

"Greater competition, gained through addressing anti-competitive regulations such as the trade-through rule, is always the consumer's best chance for the most affordable product, and I see no reason not to explore how greater competition can benefit the investor-consumer when the product is the process itself," Baker said.

John Thain, the CEO of the NYSE and Gus Sauter, CIO of Vanguard, the nation’s No. 2 fund firm, are among those scheduled to testify.

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