The apply is a longstanding concern that got here to a head previously yr with the surge in retail buying and selling exercise and the emergence of the meme inventory phenomenon.
In a brand new report, the score company mentioned the measures, if they arrive to cross, “could be probably the most vital market construction overhauls in 15 years.”
This is able to create each potential winners and losers amongst market gamers, Moody’s mentioned.
As an example, revisions to retail order dealing with necessities would seemingly negatively influence retail brokers that at the moment depend on fee for order move to generate a considerable share of their revenues.
Such a change would seemingly additionally damage digital market makers on the opposite facet of those funds, as they’d lose entry to worthwhile retail order move to commerce towards.
“They’d seemingly search to recoup misplaced income and profitability by adapting their practices to satisfy the modified regulatory necessities, however with much less sure outcomes,” Moody’s mentioned.
Conversely, measures which are unfavourable for wholesale market makers, corresponding to a potential proposal to harmonize minimal tick sizes throughout all buying and selling venues, would seemingly profit conventional exchanges, which may see a larger share of retail order move in consequence, the report mentioned.
Moreover, these sorts of modifications would seemingly produce a variety of unexpected results on the buying and selling panorama, the report famous.
“Extra broadly, the advanced machinations of the prevailing market infrastructure implies that any important change to its element components may have unexpected and unintended penalties for every sort of market participant,” it mentioned.