This one by the Securities and Exchange Commission.
A proposal under consideration by the agency would generally require brokers to route small investors’ market orders into auctions, where trading firms would compete to execute them, people familiar with the matter said. …
Brokers would have a way out. Instead of sending the orders to auctions, the brokers could attempt to have them filled at the midpoint price or better, the people said.
The proposed midpoint requirement and auctions would apply to market orders. Commonly used by small investors, market orders are instructions entered through a brokerage to buy or sell stocks at whatever their current market price is.
This sounds good, but in reality, it’s a solution for a nonexistent problem.
I’m one of those poor, downtrodden small investors, and my broker already uses a price improvement procedure whereby my market orders are routed to the trading house that offers the best execution price—which is the price shaded above the mid-point toward the buy price if I’m selling and below the mid-point toward the sell price if I’m buying. I’m already getting a better price than the mid-point.
My broker isn’t alone, either; most brokers offer/provide that procedure: it’s a means of competing for the small investors’ business.
But wait—don’t those trading houses pay the brokers for the orders to be routed to them? Why yes, yes they do. And those trading houses compete among themselves for the brokers’ business, which means the brokers get a range of trading houses from which to select the best price improvement for their customers.
The SEC’s…proposal…is just another exercise in power for the sake of power being carried out by SEC Chairman Gary Gensler.