Image source: Evelyn Hockstein | Pool | Reuters
Gary Gensler the top U.S. securities regulator has been in the spotlight for a while and for good reason.
Being the head of the SEC, Gary Gensler has one main job… and “In this role, Gensler leads the Securities and Exchange Commission to ensure fair, orderly, and efficient markets, facilitate capital formation, protect investors and build public trust in the market.”- Investopedia.com
The problem many of the retail traders have with Gensler is that they feel as if he is “All talk” and no action. Gensler has publicly spoken many times talking about issues that need to be addressed in the market… The only problem is that the issue are still not addressed.
In Gensler’s latest hearing he once again proposed new rules and changes to completely transform wall street and the stock market.
Topics such as dark pools and payment for order flow were once again brought to light.
The plan also took into account the execution process of trades which are currently in place, and what new things could maybe look like in the future to make the market fairer and more transparent.
“I asked staff to take a holistic, cross market view of how we could update our rules and drive greater efficiencies in our equity markets, particularly for retail investors,” said Gary.
Payment for order flow as defined on investopedia “Payment for order flow (PFOF) is the compensation and benefit a brokerage firm receives for directing orders to different parties for trade execution. The brokerage firm receives a small payment, usually fractions of a penny per share, as compensation for directing the order to a particular market maker.”
It is clear to the retail investors that there is conflict of interest in place with the current market structure that needs to be changed. But the market will have to wait and see what comes about from all of this in the future.