The largest U.S. securities trade group asked regulators on Thursday to end the self-regulatory status of stock exchanges, saying the structure is outdated, creates conflicts of interest, and should be replaced by some form of outside supervision. U.S. securities exchanges and non-exchange trading venues operated by broker-dealers perform largely identical functions in many respects, the Securities Industry and Financial Markets Association (SIFMA) said in a letter to the U.S. Securities and Exchange Commission. As for-profit businesses, exchanges compete with broker-dealers for the same order flow, with around 40 percent of equities trades taking place on non-exchange venues. As self regulatory organizations (SROs), exchanges are responsible for governing their members' activities, ensuring compliance with their own rules and federal securities laws, and disciplining their members for violations. "A result of this structure is that one group of businesses is empowered to oversee
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