Citation :
The Securities and Exchange Commission is preparing to propose major changes to the stock market’s plumbing as soon as this fall. one idea that has gained traction is to require brokerages to send most individual investors’ orders to be routed into auctions where trading firms compete to execute them, people familiar with the matter said. Mr. Gensler has said he wants to ensure that brokers execute orders at the best possible price for investors—the highest price for when an investor is selling, or the lowest price if they are buying. Many brokers route orders to big electronic trading firms called wholesalers, including Citadel Securities or Virtu Financial rather than to exchanges such as the Nasdaq Stock Market arguing that the wholesalers provide the best prices. Some brokers, including Charles Schwab and Robinhood accept compensation from wholesalers for routing trades to their venues. Mr. Gensler has said this practice, known as payment for order flow, creates a conflict of interest and limits competition for individual orders. Under the auctions being considered by the SEC, different firms would compete with each other to fill an individual investor’s trade, according to people familiar with the agency’s plans. Such a mechanism would fundamentally alter the business model of wholesalers, which can make more money by trading against small investors than they do on public exchanges,
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