By Will Feuer

 

The U.S. Securities and Exchange Commission on Thursday reiterated Chairman Gary Gensler's recent statements regarding taking a new look at the agency's rules, including those on payment for order flow, a critical source of revenue for Robinhood Markets Inc. and other no- or low-cost brokerage firms.

"Chair Gensler said in his recent Congressional testimony that he believes that it's appropriate to look at ways to freshen up the SEC's rules to make our equity markets as fair, efficient, and competitive as possible for investors, particularly for retail investors," an SEC spokesperson said.

"Staff is considering possible recommendations related to best execution; disclosure of order execution quality; the National Best Bid and Offer; minimum price increments ("tick size"); exchange access fees and rebates; payment for order flow; and order-by-order competition," the spokesperson said.

Earlier Thursday, Bloomberg News reported that while the SEC has decided not to outright prohibit payment for order flow, regulators may still enact other changes that make the process less profitable, citing people familiar with the matter.

Through payment for order flow, brokerages route many of their customers' orders to a few big electronic trading firms such as Citadel Securities and Virtu Financial Inc. and collect payments from those firms in return.

Shares of Robinhood, which had risen more than 10% earlier Thursday, traded almost 2% lower at $9.74 in the afternoon.

 

Write to Will Feuer at Will.Feuer@wsj.com

 

(END) Dow Jones Newswires

September 22, 2022 14:36 ET (18:36 GMT)

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