Wall Street/Reuters
Some brokers, such as TD Ameritrade, Robinhood Markets, and E*Trade, accept these payments from wholesale market makers for orders. In December 2020, Robinhood actually paid a fine related to the practice, which the SEC said raised costs for investors using the online brokerage. “Too many in the financial industry today get rich from anti-competitive and predatory practices in highly fragmented markets that result in retail investors being mistreated if not ripped off,” said Dennis Kelleher, the chief executive of Washington-based advocacy group Better Markets, who supports the SEC’s plans.
Mr. Gensler said if PFOF is still allowed, the SEC wants rules to mandate market makers disclose more data around fees these firms earn and the timing of trades.