Market structure observers might have seen this one coming. The New York Stock Exchange is suing the Securities and Exchange Commission over a pilot that would examine the practice of paying certain brokers and trading firms for posting orders on a given marketplace.

The SEC decided to launch the so-called transaction fee pilot in December to test the impact of the practice by eliminating broker payments for some bucket of stocks — despite the bemoaning of exchanges such as NYSE and Nasdaq. Now, NYSE is preparing to sue, per an op-ed in the Wall Street Journal penned by its president Stacey Cunningham. Cunningham, who took the reins of the historic institution last year, wrote: "The Transaction Fee Pilot imposes government control on the incentives that public markets can offer."

"Market-maker benefits will be sharply reduced for some securities and fully eliminated for others," she added. To be sure, others have argued that exchanges' payments to brokers amount to a kickback that complicates the market, incentivizing brokers to route orders to where they will get the biggest payment as opposed to where they will get the best price for their client. Cunningham said the pilot could harm the market. 

"Free markets should reign. We don’t look forward to suing our regulator, but by distorting market forces with arbitrary price controls, the SEC’s pilot cuts at the heart of the NYSE’s core mission of providing an orderly, transparent and efficient marketplace. With so much at stake, we have no choice but to ask for judicial relief."