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SEC aims for stock trading rule changes

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Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, April 12, 2019 in New York City

The SEC is proposing rules changes to the market that could aid smaller investors. Drew Angerer/Getty Images

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Securities and Exchange Commission Chair Gary Gensler is trying to level the playing field for small investors. He’s expected to outline a proposal for new rules to help them – possibly in a speech later today. The idea is to make sure those investors get the best deal when buying or selling stocks.

When you make a trade, you may go through a broker. Some are paid to send their orders to wholesalers – who may not give you the best price. Dennis Kelleher of the investor advocacy group Better Markets said the SEC is thinking about creating auctions.

“Which should drive down the cost for retail investors and therefore give them the best price available,” he said.

But the plumbing of trading is complicated. And if you divert the flow of buy and sell orders, some small investors could get hurt. Jaret Seiberg with the investment bank Cowen said those deals between brokers and wholesalers paved the way for free trading.

“If you start dismantling the system it’s not clear that you’re going to be able to still provide free access to trading,” he said.

Investors advocates said at least with a commission you know what you’re paying upfront. There’s plenty of time for this debate. Any new rules would have to go through a long, public process.

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