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Agency looking at retail brokerage apps

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SEC Chairman Gary Gensler told CNBC on Friday the agency is looking into how commission-free retail brokerage apps encourage more stock trading and then make money off m the execution of those trades.

“There is a little bit of a conflict of interest,” Gensler said on “Squawk Box,” one day after testifying about this issue before House Financial Services Committee. “An app that says they have zero commissions is earning revenue on your trading through something called ‘payment for order flow.’ Someone is paying them for that order flow and paying them for that data.”

Gensler said the issue comes down to the so-called gamification that apps use, such as “props, leaderboards, behavioral ways…



Source cnbc.com

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