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US SEC proposes limits on brokerage trading rebates

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US SEC proposes limits on brokerage trading rebates
© Reuters. FILE PHOTO: The headquarters of the U.S. Securities and Exchange Commission (SEC) are seen in Washington, July 6, 2009. REUTERS/Jim Bourg/File Photo

(Reuters) – Wall Street’s top regulator on Wednesday proposed new regulations it said should level the playing field among broker-dealers operating on U.S. stock exchanges by ending pricing schemes that tend to favor bigger players.

   At a public meeting in Washington, a divided five-member U.S. Securities and Exchange Commission voted 3-2 to propose banning stock exchanges from offering lower transaction prices and rebates to brokerages with higher trading volumes, something officials said creates unfair competitive advantages for larger firms.

“Sometimes the large brokers get rebates that are even larger than the fees they pay or actually have a situation where the exchanges are paying the largest brokers for that order flow,” said SEC Chair Gary Gensler.

However, the commission’s Republican members objected, saying the proposal was a solution in search of a problem.

The number and complexity of pricing tiers that can exist among exchanges, and which leave different brokerages facing sizeable differences in cost, can make price schemes complex and difficult to understand, officials said in advance of the meeting.

Ending such pricing advantages will also help prevent conflicts of interest in which brokerages may route orders for execution in ways that benefit the brokerage but not the client, according to the SEC.

The ban on transaction price discounts and rebates would not apply when brokerages trade for themselves, SEC officials said in advance of the meeting.

In those cases, stock exchanges will have to disclose pricing tiers and the number of exchange members who qualify to the SEC, which will make this available to the public.

Republican commission member Hester Peirce, a critic of the SEC’s regulatory agenda, said agency staff who drafted the proposal had not shown it was necessary.

“Though replete with concerns about possible future harms, the release fails to mention what, if any, harm has occurred to justify the proposed changes,” she said in prepared remarks during the meeting.

“Economies of scale trigger discounts in almost every industry. You buy in bulk and you pay less. Why should similar discounts be unavailable in this industry?”

The proposal is now subject to a period of public comment and may be revised prior to any decision on whether to adopt it.

The American Securities Association, a trade group which announced on Tuesday that it had joined a lawsuit against the SEC over a different regulation, said the commission had “an obligation to promote competition and transparency” on equities markets and that the ASA would study the proposal.

Stock Markets

Kuehn Law Encourages Investors of Riot Platforms, Inc. to Contact Law Firm

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New York, New York–(Newsfile Corp. – December 28, 2024) – Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of Riot Platforms, Inc. (NASDAQ: NASDAQ:) breached their fiduciary duties to shareholders. The investigation concerns potential self-dealing. Shareholders may be entitled to damages and corporate governance reforms.

If you are a long-term RIOT stockholder please contact Justin Kuehn, Esq. here, by email at justin@kuehn.law, or call (833) 672-0814. The consultation and case are free with no obligation to you. Kuehn Law pays all case costs and does not charge its investor clients. Shareholders should contact the firm immediately as there may be limited time to enforce your rights.

Why Your Participation Matters:

As a shareholder your voice matters, and by getting involved, you contribute to the integrity and fairness of the financial markets. Your investment. Your voice. Your future.

For additional information, please visit Shareholder Derivative Litigation – Kuehn Law.

Attorney advertising. Prior results do not guarantee similar outcomes.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/235430

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Kuehn Law Encourages Investors of Krystal Biotech, Inc. to Contact Law Firm

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New York, New York–(Newsfile Corp. – December 28, 2024) – Kuehn Law, PLLC, a shareholder litigation law firm, is investigating whether certain officers and directors of Krystal Biotech , Inc. (NASDAQ: NASDAQ:) breached their fiduciary duties to shareholders. The investigation concerns potential self-dealing. Shareholders may be entitled to damages and corporate governance reforms.

If you are a long-term KRYS stockholder please contact Justin Kuehn, Esq. here, by email at justin@kuehn.law, or call (833) 672-0814. The consultation and case are free with no obligation to you. Kuehn Law pays all case costs and does not charge its investor clients. Shareholders should contact the firm immediately as there may be limited time to enforce your rights.

Why Your Participation Matters:

As a shareholder your voice matters, and by getting involved, you contribute to the integrity and fairness of the financial markets. Your investment. Your voice. Your future.

For additional information, please visit Shareholder Derivative Litigation – Kuehn Law.

Attorney advertising. Prior results do not guarantee similar outcomes.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/235429

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ProShares Files for ‘Hedged’ Bitcoin ETF Products: Details

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U.Today – American ETP issuer ProShares has made another decisive move to expand its ETF products suite. The asset manager has applied to list three new Bitcoin-linked ETF products, with stock market native products as reserves. These filings come amid growing consideration of more leniency in U.S. SEC approvals next year with a new Chairman set to take office.

ProShares Bitcoin ETF filings

Per an update from ETF Store President Nate Geraci, the three filings from ProShares include the S&P 500 Bitcoin ETF, the Nasdaq-100 Bitcoin ETF and the Gold Bitcoin ETF, respectively.

Nate Geraci states these products are long in the underlying stocks or gold. These would now feature a short USD and long Bitcoin position using offerings. The dual-faced model of these new ETFs made him call the prospective offerings “BTC hedged ETFs.”

Since spot Bitcoin and ETF products secured approval from the U.S. SEC, there has been no slowing down in the number of filings.

While the number of crypto ETFs like , Hedera, and ETF products has grown, asset managers are also intensifying how these offerings target traditional finance products more closely.

Geraci aptly observed that “Bitcoin is starting to eat tradfi.”

Year of crypto Wall Street takeover

The timing of the current filing has triggered commentary from market experts on how unrelenting ETF issuers are in driving more reach for the product. Beyond the $5,500 Ethereum price forecast from Galaxy Digital (TSX:), the firm also issued a major ETF adoption prediction.

As noted, at least one big asset manager will allocate 2% of its Assets Under Management (AuM) to Bitcoin, underscoring the potential for the asset to go mainstream on Wall Street.

Already, many traditional firms are buying Bitcoin through ETFs, complementing the unrelenting acquisitions from spot buyers like MicroStrategy.

This article was originally published on U.Today

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