Wall Street mania poised to spur SEC focus on apps, shorts, T+2
Ben Bain, Claire Ballentine, Yalman Onaran and Sarah Ponczek, Bloomberg News
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Smartphone apps, short-selling rules and steps to ensure broker solvency are all sure to get a closer look from Washington policy makers once the dust settles on the market turmoil that has buffeted GameStop Corp. and silver since the start of the year.
Social media is also poised to be scrutinized, with a focus on how Reddit and Twitter have been used to mobilize herds of investors to all make the same trades. Investigations into manipulation will keep the Securities and Exchange Commission busy for the foreseeable future. The House Financial Services Committee has scheduled a hearing for Feb. 18, likely putting government watchdogs and firms such as Robinhood Markets on the hotseat.
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Jack Miller, head of trading at Baird, expects innovation to continue in US equity markets after new exchanges launched this year, new order types were approved and the US Securities and Exchange Commission adopted plans to modernize the market data infrastructure.
In September three exchanges launched in the US – Members Exchange (MEMX), MIAX Pearl Equities and Long Term Stock Exchange (LTSE) – taking the total to 16.
Jack Miller, Baird
Miller told Markets Media that it was impressive that the exchanges managed to launch during the pandemic and following the extreme volatility in March.
“They have had a muted impact with an aggregate volume of less that 1% of total average daily volume,” he added. “However, I am encouraged by the progress so far.”