The government should strip U.S. stock exchanges of the legalstatus that protects them from most lawsuits, a trade group forbrokers said.

In a letter to the Securities and Exchange Commission (SEC), theSecurities Industry and Financial Markets Association (SIFMA) saidthe self-regulatory model of organizations such as the New YorkStock Exchange and Nasdaq Stock Market is outdated. Though the SECfined Nasdaq for mishandling Facebook Inc.'s initial publicoffering last year, the legal protections may shield the marketoperator from liabilities.

The Sifma letter is the latest salvo in the fight betweenbrokers and exchanges, who in recent years have become competitorsfor stock transaction volume. The proliferation of trading venuessuch as dark pools at broker-dealers and the decline of the publicexchanges' market share has created tensions on Wall Street.