The program represents a “remarkable regulatory power grab,” according to the three exchanges, which sued the SEC in February. They say it could harm investors who may have to pay higher prices for stocks, and hinder companies that issue stock from raising money. They say the “fatal shortcoming” in the SEC’s plan is that its drawbacks are likely to outweigh the benefits. Exchange executives argue that Main Street investors have never had it better: It’s easier, faster and cheaper than ever to buy and sell shares.

“It’s in part contentious because it’s so damn complicated,” Chester Spatt, a finance professor at Carnegie Mellon University and former SEC chief economist. “The rebate is going into the brokers’ pockets and it doesn’t go to the customer.”

Some of the world’s biggest asset managers and pension funds, including CalPERS and the Ontario Teachers’ Pension Plan, support the pilot. Industry groups representing funds that manage almost $70 trillion argue that the rebates can tempt traders to seek profits at investors’ expense.

In separate comment letters in May, BlackRock Inc. and Vanguard Group Inc. both said they “strongly” support the pilot’s goals.

Data Fees

Another subject of debate: market-data fees charged by the exchanges. The costs are a lightning rod for banks and buy-side firms that purchase super-fast, detailed information about stock-trading in order to show that they’re getting the best deal for clients.

The Securities Industry and Financial Markets Association, which represents U.S. broker-dealers, estimated its members’ spending on NYSE market data rose 1,100% between 2010 and 2017. Exchange executives say that revenue from market data has grown modestly.

A federal appeals court is reviewing an October ruling by the SEC that found NYSE and Nasdaq had failed to justify some data-fee increases. The regulator also refused to approve other fee increases that were contested by Sifma and Bloomberg LP, the parent company of Bloomberg News, which is an associate member of the industry group.

In the past year, legal clashes over the pilot program have injected an unusual level of drama into relationships that in the past have been collegial.

“A lot of people are angry,” said Mehmet Kinak, global head of systematic trading and market structure at asset manager T. Rowe Price Group Inc., which is among the pilot’s backers. “It’s much more confrontational than it used to be.”