The SEC is reviewing changes to share trading after an explosion of interest in meme stocks, including the use of payment for order flow
SECwill review a host of rules related to the equity market structure, Gary Genslersaid.
- That includes the compensation Wall Street brokers receive for executing stock trades.
- Shares in high-speed trader Virtu Financial fell 7.7% after the SEC chairman's speech.
The Securities and Exchange Commission is looking at changing rules around share trading after the day-trader frenzy around
Gensler previously called out popular investing apps like Robinhood that have introduced millions of amateur investors to stocks through the lure of zero commissions. He criticized the company for encouraging the gamification of the stock market, and for not doing enough to educate its user base of the risks associated with investing.Robinhood's business model, which operates on a system of
The SEC will look into this practice, that uses phone alerts and other notifications to get investors to trade more, Gensler said at a Piper Sandler conference in New York."The question is whether our equity markets are as efficient as they could be, in light of the technological changes and recent developments," he said. Most of these issues came to regulatory attention after day traders used social platforms like Reddit to bid up prices of heavily-shorted stocks like GameStop, fuelling an over 1,200% surge in the video-game retailer's stock in January.
More recently, a string of so-called meme stocks including AMC, Bed Bath & Beyond, and BlackBerry saw $1.27 billion in retail investor inflows in the past two weeks. That matches the peak of GameStop's short squeeze earlier in the year.
New SEC rules could impact the business models that online
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