Sam Boughedda

The Wall Street Journal published late Monday that changes are being made by the Securities and Exchange Commission to how the stock market works as of this fall.

The article authored by Paul Kiernan and Alexander Osipovich states that after Chairman Gary Gensler asked SEC staff last year to look into ways to make the stock market more efficient for small investors and public companies, one idea that stuck was to require brokerages to route the majority of individual investors’ orders to auctions. According to people familiar with the subject, traders will then compete to execute the orders.

SEC began to speak with market participants regarding their plans.

Gensler wants to ensure that market orders are processed differently under the new rule.

Gensler stated previously that the SEC is assessing future payments for order flow. A practice in which certain brokers such as Robinhood (NASDAQ;) take payment to route trades to specific parties for execution, Gensler said.

Changes under review would see firms competing with one another to fulfill orders. This could alter their business model which is currently under scrutiny. Firms can make more by trading with smaller retail investors than the current model.

The WSJ reported that some Wall Street businesses backed out last year, after learning their business models could be targeted. They have also increased Washington’s lobbying spending and campaign spending.

Robinhood’s shares dropped 0.7% after the WSJ report. The news caused market maker Virtu Financial Inc. to close down 3.3%.