Gensler’s plan would require trading companies to compete directly to execute trades from retail investors, thus increasing competition.
The SEC plans to scrutinise the controversial payment for order flow practice which sees some brokers paid by wholesale market makers for orders.
Gensler said the new rules would push market makers to disclose more data on how much these companies receive in fees as well as the timing of trades in favour of investors.
“I asked staff to take a holistic, cross-market view of how we could update our rules and drive greater efficiencies in our equity markets, particularly for retail investors,” Gensler told an industry audience on Wednesday.
The announcement by the SEC is one of the largest shake-ups of US equity market rules in recent times. It will probably lead to formal proposals in the Autumn, with the public given the opportunity to consider them before a vote by the SEC takes place.