CalSTRS Backs SEC Plan to Allow Faster-Trade Option

A U.S. government proposal to let investors opt for faster trades rather than wait for the best price would set a standard that protects shareholders, the California State Teachers’ Retirement System said Thursday.

The Securities and Exchange Commission is considering relaxing the so-called trade-through requirement that exchanges find the best price for investors. The measure causes many orders to be routed to the New York Stock Exchange, where matching buy and sell orders can take as long as 20 seconds.

CalSTRS, the third-largest public pension fund, wrote to SEC Secretary Jonathan Katz that although best price is an important criterion for judging trading results, it’s important for investors to have the choice of opting out of the rule when speed may be equally or more important.

The SEC is soliciting public comment until June 30 on the plan, which is part of the biggest proposed overhaul of rules for trading on U.S. markets since 1975.