In a 3-2 split decision, the U.S. Securities and Exchange Commission today voted to adopt controversial National Market System (NMS) reforms.

The proposed reforms would extend the trade-through rule to the Nasdaq Stock Exchange, and other national markets. The goal is to ensure that investors get the best price on their electronic trades. The rule will be phased in, starting April 10 with a small group of stocks; expanding to cover all stocks by June 12.

Regulation NMS is designed to modernize and strengthen the regulatory structure of the U.S. equity markets, the SEC says. However, critics complain that it’s anti-competitive, and worry that the SEC is favouring long-term investors over traders by requiring markets to privilege price over speed of execution.

The vote, as expected, divided along party lines, with the two Republican commissioners (Cynthia Glassman and Paul Atkins) voting against the proposal and pledging to submit written dissents; and, the two Democratic appointees voted in favour of the rule. SEC chair William Donaldson sided with the Democrats.

Glassman opposed the trade-through-rule for all exchanges, noting that it’s unnecessary. Atkins called it a sad day for the SEC.

Along with extending the trade-through rule, the proposals include three other substantial reforms. The “access rule” would require fair access to quotations, establish a limit on access fees to harmonize the pricing of quotations across different trading centers. The “sub-penny rule” would prohibit market participants from accepting, ranking, or displaying orders, quotations, or indications of interest in a pricing increment smaller than a penny, except for orders, quotations, or indications of interest that are priced at less than $1.00 per share. Finally, it would update the requirements for consolidating, distributing, and displaying market information.

In the same meeting, the SEC commissioners also voted unanimously to adopt a rule allowing brokers to offer fee-based advisory accounts without registering as advisors. It also pledged to study the issue further to determine if other regulatory measures are required.