SEC Asks: Should Exchanges Operate As Regulators?

The U.S. Securities and Exchange Commission is in the midst of asking an interesting question: should for-profit exchanges operate as an industry regulator?

Stock exchanges’ self-regulatory role was established well before the establishment of the SEC in 1934. The exchanges, non-profit entities at the time, derived special status from the regulatory role, such as the sale of lucrative market data and limits on private lawsuits against them, notes a report on the topic in Bloomberg Businessweek.

The SEC is focusing on the exchanges' regulation of competitors,...