WASHINGTON, D.C.—Director of Securities Policy Benjamin Schiffrin issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission (SEC) in response to a proposal by the New York Stock Exchange to extend trading hours on its NYSE Arca securities exchange to 22 hours a day, 5 days a week:
“Allowing overnight trading on securities exchanges would turn exchanges into casinos. Trading outside of core market hours is already a gambler’s paradise. Sophisticated market participants are able to take advantage of retail investors, who do not get the best prices on their trades. For retail investors, trading after hours is like swimming with sharks. There is no reason to further extend trading hours on a securities exchange to 22 hours a day.
“The easy analogy is to sports betting. The National Council on Problem Gaming estimates that approximately 2.5 million adults in the U.S. are severely addicted to gambling. This is partly due to an ability to place bets around the clock. With sports betting, the ease of betting from a phone at any time of day combined with the techniques sports betting apps use to induce betting has proven to be irresistible. It’s not surprising that the financial industry is trying to replicate the success that the gambling industry has had with the availability of around-the-clock sports betting, and Robinhood’s contemplated move into sports betting just makes the link with the financial markets explicit. But financial markets that emulate casinos might be good for the house but not for investors. In considering the proposal, the SEC must focus on investor protection and not the industry’s profit maximization.
“Indeed, some say that the key question as to whether there will be 24/7 stock trading is whether Wall Street can make a profit from it. But that should not be the key question. The key question should be whether it is good for investors, and the answer is that it is not.”
Our comment letter is available here.
###
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
