Major market makers and institutional firms warned the Securities and Exchange Commission on Tuesday that eliminating the decades-old Best-Price Rule would strip away the regulatory theater required to comfortably front-run retail investors.
Major market makers and institutional trading firms warned the Securities and Exchange Commission on Tuesday that eliminating the decades-old Best-Price Rule would destroy the false sense of security that retail traders rely on before losing their savings.
In a blistering 400-page public comment, a coalition of Wall Street firms argued that the regulation is a foundational piece of market illusion. Lobbyists stressed that the legally mandated promise of a "best price" is exactly what makes everyday investors feel safe enough to route their retirement accounts through a labyrinth of private dark pools specifically designed to shave fractions of a penny off every share.
The American financial system relies on the absolute guarantee that you are getting a fair deal right up until the millisecond we step in front of your order.
SEC Chair Gary Gensler defended the rollback during a morning press conference, noting that the agency was simply trying to reduce overhead for major institutions. Gensler explained that the SEC plan would allow market makers to legally overcharge customers out in the open, saving them the expense of building $50 million microwave transmission towers in New Jersey to outpace the regulation.
Following the announcement, shares of major retail brokerages surged on the prospect of finally being able to just keep the difference between what a stock actually costs and whatever they feel like charging a graphic designer from Ohio for it.