As the SEC head Gary Gensler explored methods to provide investors with better pricing, retail brokers may no longer be able to offer trading via ‘payment for order flow.’
SEC reforms
Mr. Gensler gave a speech on Wednesday outlining his planned modifications to the stock market’s plumbing, which were first reported by The Wall Street Journal earlier this week.
One of the most significant changes being considered by the SEC is the possibility of requiring more private investors’ stock orders to be sent to auctions.
That would be a significant shift from the existing structure, which sees many of Robinhood’s clients’ orders routed through a few large electronic trading firms like Citadel Securities and Virtu Financial Inc.
Other reforms being considered by the SEC might result in more small-investor trades being conducted on stock exchanges.
SEC proposed regulations on free trading
After the Securities and Exchange Commission (SEC) proposed new regulations on free trading, Robinhood Markets recovered marginally from its initial decline, presently down 1.4 percent to US$8.27.
PFOF is a practice in which some retail brokers, including Robinhood, Charles Schwab Corp, and TD Ameritrade, benefit from the sale of their client’s orders to large Wall Street market makers like Citadel Securities and Virtu Financial.
PFOF accounted for over three-quarters of Robinhood’s revenue in the first quarter of 2022, according to reports, with brokers earning US$3.8 billion last year and US$2.8 billion in 2020.
One of Gensler’s suggestions is to transmit trade orders to an auction process, similar to how the options market does things.
According to Robinhood Chief Legal Officer Dan Gallagher, SEC Chairman Gary Gensler may have a difficult time enforcing his intentions, which stem from frantic trading in GameStop Corp. and other similar stocks last year.
Mr. Gallagher said on Wednesday that the existing structure of the US equities markets provides huge benefits to ordinary investors, such as zero-commission trading and lightning-fast execution of stock orders.
AREAS HIGHLIGHTED BELOW (IN PURPLE) REFLECT PLAGIARISM
The key source referring to plagiarism is as follows:
Robinhood will no longer be able to offer trading via ‘payment for order flow’
As the SEC head Gary Gensler explored methods to provide investors with better pricing, retail brokers may no longer be able to offer trading via ‘payment for order flow.’
SEC reforms
Mr. Gensler gave a speech on Wednesday outlining his planned modifications to the stock market’s plumbing, which were first reported by The Wall Street Journal earlier this week.
One of the most significant changes being considered by the SEC is the possibility of requiring more private investors’ stock orders to be sent to auctions.
That would be a significant shift from the existing structure, which sees many of Robinhood’s clients’ orders routed through a few large electronic trading firms like Citadel Securities and Virtu Financial Inc.
Other reforms being considered by the SEC might result in more small-investor trades being conducted on stock exchanges.
SEC proposed regulations on free trading
After the Securities and Exchange Commission (SEC) proposed new regulations on free trading, Robinhood Markets recovered marginally from its initial decline, presently down 1.4 percent to US$8.27.
PFOF is a practice in which some retail brokers, including Robinhood, Charles Schwab Corp, and TD Ameritrade, benefit from the sale of their client’s orders to large Wall Street market makers like Citadel Securities and Virtu Financial.
PFOF accounted for over three-quarters of Robinhood’s revenue in the first quarter of 2022, according to reports, with brokers earning US$3.8 billion last year and US$2.8 billion in 2020.
One of Gensler’s suggestions is to transmit trade orders to an auction process, similar to how the options market does things.
According to Robinhood Chief Legal Officer Dan Gallagher, SEC Chairman Gary Gensler may have a difficult time enforcing his intentions, which stem from frantic trading in GameStop Corp. and other similar stocks last year.
As reported by Robinhood, the Chief Legal Officer, last year Gary Gensler, the SEC President, had frenzied trading, which led to the outgrowth of SEC’s plans; Gensler, as it appears now, is most likely to go through rough sledding to get his plans officially accepted.
Mr. Gallagher said on Wednesday that the existing structure of the US equities markets provides huge benefits to ordinary investors, such as zero-commission trading and lightning-fast execution of stock orders.
Source: https://www.thecoinrepublic.com/2022/06/11/robinhood-will-no-longer-be-able-to-offer-trading-via-payment-for-order-flow/