Market structure: SEC remarks on potential updates

June 2022

KPMG Insights. SEC’s recent speech on “Market Structure and the Retail Investor” offers broker-dealers and other market participants a preview of the potentially expansive changes that may be proposed across the SEC’s stock-trading rules this year.  The speech highlights perceived inefficiencies in the U.S. national market system that may disproportionately impact retail investors. The SEC’s concerns are partly influenced by the 2021 events surrounding the trading of meme stocks, which brought out potential issues and impacts related to current payment for order flow practices, best execution, market competition, and conflicts of interest. Select Capital Markets industry participants have already begun to respond to the outlined considerations with some suggesting that the market is functioning well for ordinary investors and that the scope of the potential changes as outlined could potentially inhibit new retail investors’ entry into the markets.