SEC Chair Gary Gensler talks approval of new trading rules

Introduction

In a recent CNBC interview, SEC Chair Gary Gensler discussed the commission's unanimous decision to relax rules regarding stock price increments. This significant change allows for quoting in increments of half a penny, a shift from the previous penny-based quoting that has been in place for nearly two decades. Gensler emphasized that while the initial decision to implement penny increments was beneficial at the time, the evolving landscape of the stock market necessitated this new adjustment.

Gensler explained that the U.S. stock market, recognized as the most liquid and deepest globally, could further enhance competitiveness and reduce costs for investors with these changes. Alongside the new pricing structure, there was a reduction in the maximum access fees that stock exchanges can charge, lowering it from three-tenths of a penny to one-tenth of a penny. This effort aims to improve liquidity and transparency in the market, particularly regarding transactions involving larger share volumes.

Reflecting on the impact of these changes, Gensler pointed out that the potential savings for retail investors may seem negligible on a per-trade basis, but the aggregate effect across the vast number of shares traded daily—in excess of 11 billion—could lead to substantial savings over time.

The discussion also touched on past proposals made in December 2022 concerning the operations of off-exchange market makers such as Citadel and Virtu, with the aim of shifting trading back to on-exchange platforms. Gensler provided updates on existing measures, including the recent implementation of a rule that allows investors quicker access to funds from stock sales. He noted that the SEC is continually evaluating public feedback on existing proposals to ensure that they align with the needs of investors.

On the topic of cryptocurrency regulation, Gensler acknowledged the harsh realities of the market, which has been riddled with fraud and scams. He emphasized the need for clarity within existing U.S. securities laws to protect investors, asserting that maintaining fundamental protections is non-negotiable, regardless of the underlying technology.

In summary, Gensler's remarks reaffirm the SEC's commitment to fostering a fair and transparent trading environment while protecting investors from potential risks associated with both traditional and digital assets.

Keyword

• SEC
• Gary Gensler
• trading rules
• half penny increments
• stock market
• access fees
• investor protections
• cryptocurrency

FAQ

Q: What new changes did the SEC implement regarding stock price quoting?
A: The SEC has relaxed the quoting rules, allowing for half-penny increments instead of the previously mandated penny increments.

Q: How will these changes impact retail investors?
A: While the savings on a single trade may be minimal, the cumulative effect across the volume of shares traded could result in significant cost reductions for investors.

Q: What measures has the SEC taken regarding off-exchange market makers?
A: The SEC is assessing public feedback on proposals aimed at bringing trading back to on-exchange platforms but has already implemented rules for quicker cash access for investors.

Q: How does SEC Chair Gensler view cryptocurrency regulation?
A: Gensler views the cryptocurrency market as high-risk, emphasizing the need for regulatory clarity and investor protections against the potential for fraud and scams.