Confirming what we reported two days, SEC Chair Gary Gensler said he has asked agency staff to consider requiring brokerages to route individual investors’ orders to buy or sell stocks into auctions, as part of an effort to increase competition in the market. These proposed (and unprecedented) changes to market structure would make it virtually impossible to frontrun retail orders.
“Right now, there isn’t a level playing field among different parts of the market: wholesalers, dark pools, and lit exchanges,” Gensler said in remarks prepared for an event hosted by Piper Sandler.
“It’s not clear, given the current market segmentation, concentration, and lack of a level playing field, that our current national market system is as fair and competitive as possible for investors.”
The potential change would represent a major shakeup to the lucrative business of executing trades in the stock market, and directly impact how brokerages including Citadel Securities, Virtu Financial and Robinhood Markets process many retail trade orders.
In addition, Mr. Gensler said he has directed SEC staff to potentially allow stock exchanges to quote shares in increments of less than 1 cent. This could enable venues such as Nasdaq or the New York Stock Exchange to better compete with wholesalers, which can beat the prices publicly displayed on exchanges by adding or subtracting hundredths of a penny to the price of a stock.
“Why not allow all venues to have an equal opportunity to execute at sub-penny increments?” Mr. Gensler said in the speech.
HOOD shares are down hard… having already puked earlier in the week on the leaks of Gensler's plans…
And may go lower…
If Gensler bans PFOF, HOOD is worth exactly $0.00
— zerohedge (@zerohedge) June 6, 2022
Which seems to have prompted a broad puke in the markets…
The bottom line: don't hold your breath, but it appears that some 13 years after this website first brought attention to the widespread scam that is HFT, the "high freaks" may be on their way out.