Why Regulation Best Execution Makes Payment for Order Flow Difficult: SEC Roundup
Welcome to SEC Roundup, a bimonthly video series by Paul Hastings partners and former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro exploring current SEC topics with thought leaders and industry experts.
In this episode, Morgan and Zaccaro talk with Bloomberg columnist Nir Kaissar about two SEC proposed rules that would dramatically alter the way securities transactions are handled.
“Taken together, these rules appear designed to discourage the type of commission-free trading (in exchange for receiving payment-for-order-flow from market makers) that has proven immensely popular with retail securities traders,” according to Morgan.
Morgan and Zaccaro talk with Kaissar about whether “these proposed rules protect investors or do they signal the beginning of the end to the movement toward ‘democratization of the capital markets?’”
When looking at Reg Best Execution, “you are struck by the compliance obligation that they’re [the SEC is] putting on financial firms that are using payment for order flow,” Kaissar says.
See the video above for the discussion with Kaissar.
