SEC Proposes Sweeping Changes for Stock Trading

Gary Gensler aims to enhance competition in the stock market by leveling the playing field for new entrants. This involves challenging the dominance of wholesalers and introducing an auction model for order processing. The changes face resistance from established firms, who argue the current system benefits all investors. The auction model will require exchanges to meet specific criteria, potentially altering business models.

What is the main issue Gary Gensler is trying to address in the stock trading market?

• Increasing the number of wholesalers

• Eliminating all forms of competition

• Reducing the number of retail investors

• Leveling the playing field for new entrants

Why are some firms resistant to the proposed changes in the stock trading market?

• They support the changes but want more time

• They want to eliminate retail investors

• They argue the current system benefits all investors

• They believe the changes will increase their profits

What historical regulation is mentioned as a benchmark for the current system?

• Sarbanes-Oxley Act

• Reg NMS in 2005

• Dodd-Frank Act

• Glass-Steagall Act

What is a key feature of the new auction model for processing orders?

• It requires exchanges to meet specific criteria

• It allows wholesalers to bypass the auction

• It eliminates the need for displaying quotes

• It applies to all order sizes without exception

What might some trading systems need to do to comply with the new auction model?

• Change their business models

• Stop displaying quotes

• Reduce the number of auctions

• Increase their trading volume