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Gensler zeroes in on Citadel Securities as SEC considers payment for order flow ban
https://finance.yahoo.com/news/gensler-zeroes-in-on-citadel-securities-as-sec-considers-payment-for-order-flow-ban-191715790.html
Gensler zeroes in on Citadel Securities as SEC considers payment for order flow ban
Brian Cheung
September 14, 2021, 3:17 pm
Wall Street’s top cop said Tuesday that the dominance of Citadel Securities in the business of routing order flow may not be giving retail investors the best deal.
U.S. Securities and Exchange Commission Chair Gary Gensler told the Senate Banking Committee that he’s concerned about Citadel Securities’ 47% market share over all U.S.-listed retail volume. Virtu Financial (VIRT), another wholesaler, controls about 25% to 30%.
“I’m pro competition, and I’m not sure the payment for order flow system really is the best competitive landscape,” Gensler said.
Gensler did not mention Citadel Securities by name, but footnotes in the SEC chair’s prepared remarks did.
The SEC has not ruled out the possibility of a full ban on payment for order flow, the practice of a brokerage (like Robinhood) passing on stock orders to a wholesaler (like Citadel Securities) to actually locate and execute.
When those wholesalers find a stock at a cheaper price than the investor ordered, the savings are split by the wholesaler and the brokerage — who can then pass on cost savings to the investor in the form of a better price. The payment for order flow model is a major reason why brokerages like Robinhood (HOOD) can offer zero commission trades.
Wholesalers also get rebates from exchanges like the New York Stock Exchange for providing liquidity, entrenching their roles as middlemen in stock trades.
“I think the inherent conflicts of payment for order flow and rebates on the stock exchanges both may make our markets less efficient,” Gensler said.
Yahoo Finance reported that Gensler raised the issue of concentration of retail order flow in the first meeting of the White House’s Competition Council last Friday, President Joe Biden’s initiative to push federal agencies to curb anti-competitive behavior.
‘All on the table’
Questions remain about how the SEC will proceed on any reform.
The former Goldman Sachs banker alluded not only to the possibility of banning payment for order flow, but rethinking rebates and the way that prices are referenced under the benchmarks set by National Best Bid and Offer (NBBO).
“In this area, it’s all on the table,” Gensler said, adding that the SEC’s single goal is to encourage competition “to lower the cost and raise the efficiency" of the equity market structure.
Once an arcane mechanic of the brokerage industry, payment for order flow earned the national spotlight during the early 2021 frenzy over meme stocks like GameStop (GME).
Robinhood, which went public in late July, has relied heavily on payment for order flow and saw its revenues from the practice nearly triple in 2020.
Many brokerages followed Robinhood in leaning more heavily on payment for order flow as they eliminated commissions, although the likes of Fidelity have remained resistant to the model.
After being pulled to Capitol Hill to testify after the run-up in GameStop froze some trading activity, Citadel Securities’ Ken Griffin said payment for order flow has been helpful to the brokerage industry and the retail investor at large.
“This has been very important for the democratization of finance, it has allowed the American retail investor to have the lowest execution cost they’ve ever had in the history of the U.S. financial market,” Griffin said.
Gensler said Tuesday the SEC is close to publishing its report on the meme stock episode, noting that other SEC commissioners are currently reviewing it.
Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
Read the latest financial and business news from Yahoo Finance
$HMBL Gensler zeroes in on Citadel Securities as SEC considers payment for order flow ban
https://finance.yahoo.com/news/gensler-zeroes-in-on-citadel-securities-as-sec-considers-payment-for-order-flow-ban-191715790.html
Gensler zeroes in on Citadel Securities as SEC considers payment for order flow ban
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Brian Cheung
September 14, 2021, 3:17 pm
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Wall Street’s top cop said Tuesday that the dominance of Citadel Securities in the business of routing order flow may not be giving retail investors the best deal.
U.S. Securities and Exchange Commission Chair Gary Gensler told the Senate Banking Committee that he’s concerned about Citadel Securities’ 47% market share over all U.S.-listed retail volume. Virtu Financial (VIRT), another wholesaler, controls about 25% to 30%.
“I’m pro competition, and I’m not sure the payment for order flow system really is the best competitive landscape,” Gensler said.
Gensler did not mention Citadel Securities by name, but footnotes in the SEC chair’s prepared remarks did.
The SEC has not ruled out the possibility of a full ban on payment for order flow, the practice of a brokerage (like Robinhood) passing on stock orders to a wholesaler (like Citadel Securities) to actually locate and execute.
When those wholesalers find a stock at a cheaper price than the investor ordered, the savings are split by the wholesaler and the brokerage — who can then pass on cost savings to the investor in the form of a better price. The payment for order flow model is a major reason why brokerages like Robinhood (HOOD) can offer zero commission trades.
Wholesalers also get rebates from exchanges like the New York Stock Exchange for providing liquidity, entrenching their roles as middlemen in stock trades.
“I think the inherent conflicts of payment for order flow and rebates on the stock exchanges both may make our markets less efficient,” Gensler said.
Yahoo Finance reported that Gensler raised the issue of concentration of retail order flow in the first meeting of the White House’s Competition Council last Friday, President Joe Biden’s initiative to push federal agencies to curb anti-competitive behavior.
‘All on the table’
Questions remain about how the SEC will proceed on any reform.
The former Goldman Sachs banker alluded not only to the possibility of banning payment for order flow, but rethinking rebates and the way that prices are referenced under the benchmarks set by National Best Bid and Offer (NBBO).
“In this area, it’s all on the table,” Gensler said, adding that the SEC’s single goal is to encourage competition “to lower the cost and raise the efficiency" of the equity market structure.
Once an arcane mechanic of the brokerage industry, payment for order flow earned the national spotlight during the early 2021 frenzy over meme stocks like GameStop (GME).
Robinhood, which went public in late July, has relied heavily on payment for order flow and saw its revenues from the practice nearly triple in 2020.
Many brokerages followed Robinhood in leaning more heavily on payment for order flow as they eliminated commissions, although the likes of Fidelity have remained resistant to the model.
After being pulled to Capitol Hill to testify after the run-up in GameStop froze some trading activity, Citadel Securities’ Ken Griffin said payment for order flow has been helpful to the brokerage industry and the retail investor at large.
“This has been very important for the democratization of finance, it has allowed the American retail investor to have the lowest execution cost they’ve ever had in the history of the U.S. financial market,” Griffin said.
Gensler said Tuesday the SEC is close to publishing its report on the meme stock episode, noting that other SEC commissioners are currently reviewing it.
Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
Read the latest financial and business news from Yahoo Finance
$HMBL Now, finally, everyone can see the true reason for the few Billions of so called Preferred Shares. It is a classic Poison Pill Defense against a Hostile Takeover of our $Trillion Company!
Put this finally to rest!
$HMBL Preferred Shares to be returned and retired? How long into the future will we wait to hear this is completed?
Would be very encouraging for our market cap!
HMBL 2022 $10, $20, $50!
Cheers!
$HMBL Terrific Tuesday! Cheers!
$ZNOG Blessed Yom Kippur! Cheers!
$HMBL Great DD Outlook for the Weekend! Cheers!
https://marketplace.humblpay.com
https://marketplace.humblpay.com/item/e7a1a99a-dc5c-4c89-9a23-46ab8e4e52a1
SS Great DD Post! Cheers!
You said ...
HMBL Kahboom ! What can NFT's do? Quoted from the article below. "An unnamed junior analyst reportedly had an in-depth conversation with Solomon about NFTs and what the future could hold for them. However nearing the end of their conversation, the unnamed junior analyst reportedly showed Solomon a tweet showing an EtherRock selling for $1,200,000 in Ether. After realizing someone actually paid that much for a picture of a cartoon rock, Solomon began sweating before he grabbed at his chest and collapsed. He never woke up. " https://thestonkmarket.com/goldman-sachs-ceo-passes-away-following-heart-attack-during-meeting-about-nfts/
Just can't make stuff like this up like how important HMBL's Operational easy to use NFT Gallery marketplace is. To the moon!
$HMBL Rob Luna explained that our Beloved CEO really wanted Main Street and not just Wall Street to reap the benefits!
That's why they took the path they did.
Cheers!
$HMBL #HUMBLNation podcast is live on YouTube with @ItsGabrielleT ...
Brian Foote
@humblceo
#HUMBLNation podcast is live on YouTube with
@ItsGabrielleT
Went longer so global audience could really get to know her, since HUMBL was her first ever podcast. 22 conference titles at Harvard. Second fastest woman ever in 200M (so far). Even better person off the track! #HUMBL
Quote Tweet
#HUMBLNation podcast is live on YouTube with @ItsGabrielleT Went longer so global audience could really get to know her, since HUMBL was her first ever podcast. 22 conference titles at Harvard. Second fastest woman ever in 200M (so far). Even better person off the track! #HUMBL https://t.co/pgDbV2NDeQ
— Brian Foote (@humblceo) July 31, 2021
$HMBL Bear Shorts I hope will get Margin Calls when this hits $5, $10 and then $50 to $100 not long from now!
Cheers!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Cheers!
$HMBL Preferred Shares to be returned and retired? How long into the future will we wait to hear this is completed?
Would be very encouraging for our market cap!
Cheers!
HMBL 2022 $10, $20, $50!
$HMBL Now, finally, everyone can see the true reason for the few Billions of so called Preferred Shares. It is a classic Poison Pill Defense against a Hostile Takeover of our $Trillion Company!
Put this finally to rest!
Cheers!
$HMBL NFT Gallery that opened September 7, 2021 is going great! Cheers!
$HMBL Bear Shorts I hope will get Margin Calls when this hits $5, $10 and then $50 to $100 not long from now!
Cheers!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Cheers!
$HMBL WOW! Up 12+%! Fantastic Trading Action! Outstanding Accumulation and Consolidation phase has given way to Solid Positive Chart!
Cheers!
$HMBL Lion Website has Humbl on Top!
https://www.thelion.com
https://www.thelion.com/bin/aio_msg.cgi?cmd=search&symbol=HMBL
$HMBL Preferred Shares to be returned and retired? How long into the future will we wait to hear this is completed?
Would be very encouraging for our market cap!
Cheers!
HMBL 2022 $10, $20, $50!
$HMBL Now, finally, everyone can see the true reason for the few Billions of so called Preferred Shares. It is a classic Poison Pill Defense against a Hostile Takeover of our $Trillion Company!
Put this finally to rest!
Cheers!
$HMBL Bear Shorts I hope will get Margin Calls when this hits $5, $10 and then $50 to $100 not long from now!
Cheers!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Have a Happy Holiday Weekend to all Longs!
Cheers!
$HMBL NFT Gallery to open September 7, 2021! Cheers!
P.S. And, more great PRs in the works!
$HMBL WOW! TGIF! Up 10+%! Fantastic Friday Trading Action! Outstanding Accumulation and Consolidation phase has given way to Solid Positive Chart!
Happy Holiday Weekend!
Cheers!
$HMBL NFT Gallery to open September 7, 2021! Cheers!
P.S. And, more great PRs in the works!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Have a Happy Holiday Weekend to all Longs!
Cheers!
$HMBL WOW! TGIF! Up 10+%! Fantastic Trading Action! Happy Holiday Weekend! Cheers!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Cheers!
$HMBL I love the smell of napalm and charred Bear Shorts in the morning!
It smells like ... Victory!
Cheers!
$HMBL WOW! TGIF! Have a great weekend! Cheers!
$HMBL WooHoo! TGIF! Have a great weekend Longs! Cheers!
I love the smell of burning Bear-Shorts in the morning!
It smells like Victory!
Everybody knows ... Bear-Shorts don't surf!
LOL!
$HMBL TGIF! Have a Great Weekend Longs! Cheers!
$HMBL Hindenburg is just the start of the Full Scale Government Investigation into Bear Short Sellers and their Message Boards ...
$HMBL Preferred Shares to be returned and retired? How long into the future will we wait to hear this is completed?
Would be very encouraging for our market cap!
Cheers!
HMBL 2022 $10, $20, $50!
$HMBL Preferred Shares to be returned and retired? How long into the future will we wait to hear this is completed?
Would be very encouraging for our market cap!
Cheers!
HMBL 2022 $10, $20, $50!
$HMBL New App Version 1.9.2056 just out! ...
Lots of cool new features and updates! ...
Cheers! ...
$HMBL Hindenburg is just the start of the Full Scale Government Investigation into Bear Short Sellers and their Message Boards ...
$HMBL Great Trading Action with Accumulation and Consolidation!
Ready for more Olympic News!
Cheers! TGIF!
$HMBL Looking forward to more Olympic PR's! Cheers!
JB3: I agree ... when is the next date? ...
You said ...