In an accompanying statement to the SEC’s decision, Chairman Jay Clayton — my former colleague at Sullivan & Cromwell — rightly points out that markets should serve the interests of ordinary investors. One easy way to do that, Angel says, is to “make clear that brokers can rely on SIP data to execute trades for investors,” which would remove any doubts about the need for more expensive proprietary data.
Ironically, however, this era of free trading ushered in by cheap and widely accessible market data may prove costly for Main Street. I suspect that many investors will use free trading to gamble rather than invest and that some brokers will use it to push predatory products on unsuspecting investors.
Regulators can help. They should promote financial literacy by giving investors the resources they need to be better informed. They should also raise educational and licensing standards for brokers and financial advisers so that ordinary investors have access to the best possible advice.
In the meantime, the battle between Wall Street and stock exchanges is likely to rage on, with no discernible significance to Main Street.
Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.