The financial services industry has been laser-focused on reforms to securities-market plumbing recently proposed by the Securities and Exchange Commission, with many of the sector’s most influential leaders and institutions loudly criticizing a proposal that would overhaul how retail trades are executed.
Ronan Ryan, president and co-founder of the equities exchange IEX, argued in an interview with MarketWatch that what’s important to most Americans are proposed changes to rules that govern stock exchanges like Intercontinental Exchange Inc.’s
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New York Stock Exchange and the Nasdaq Inc
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Ryan argued that most ordinary people “have way more money in their 401(k) plans than then do sloshing around in their Robinhood accounts,” and that this makes it important that institutions that manage that money get a fair shake when they buy and sell stocks. Read next: Virtu CEO slams Gensler reforms as Democratic plan to curb retail trading Recent data from Pew shows that while only 14% of Americans own individual stocks, 52% are invested in the market, with the majority of that coming in the form of employer-sponsored retirement plans or individual retirement accounts. That’s why, Ryan said, policy makers and the industry should place more emphasis on the rules that govern stock exchanges and alternative trading systems, called “dark pools,” where pension funds and institutional investors do most of their trading. SEC Chairman Gary Gensler unveiled four market-structure rule proposals last December, one of which could have a profound impact on the prices institutions pay to buy and sell stock and the revenues earned by securities exchanges and market making firms that execute trades on the exchanges. The proposal to update rules governing the U.S. national market system, known as Reg NMS, would allow exchanges to buy and sell stocks in increments of less than one penny and would lower a cap set on fees that exchanges can charge traders to access their quotes. The public comment period for the changes ended in March, and the SEC will review that input before voting on a final rule package, though the timeline for such a vote is uncertain. “In today’s markets, exchanges often rebate to one set of traders the access fees pa …
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