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Wall Street Gets Ready to Rumble Over Stock-Trading Rules

The SEC’s Gary Gensler is proposing big changes to the system that’s fueled the rise of free brokerage apps.
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Illustration: Xavier Lalanne-Tauzia

A battle is brewing in Washington and on Wall Street over how stocks get traded. At issue is whether retail investors get the best bang for their buck.

The controversy may be puzzling to anyone outside the industry, given that commissions have fallen to zero on trading apps and discount brokerage services. But US Securities and Exchange Commission Chair Gary Gensler is asking whether those trades come with hidden costs, or if it’s even possible to tell under the current system whether retail investors are getting the best prices when they buy and sell stocks. “The markets have become increasingly hidden from view,” Gensler said in a June speech delivered remotely to an investment banking conference in New York. As he previewed a sweeping proposal for new rules, finance executives in the room sat furiously typing on their phones and shaking their heads, while neglecting their chicken entrees.