Banks, trading firms and brokers are bracing for the biggest overhaul of US stock trading in almost two decades with the release on Wednesday of plans designed primarily to lower costs for small investors.
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US markets watchdog plans biggest overhaul of stock trading in nearly 20 years
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Last year’s trading frenzy highlighted the practice of “payment for order flow” where popular retail brokers such as Robinhood are paid to route customer orders to big trading companies including Citadel Securities and Virtu Financial. So-called PFOF is banned in several other jurisdictions including the UK and Canada. Gensler has warned about the risks of conflicts of interest raised by PFOF, including brokers’ use of video game-like digital features to encourage customer trading.
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