Clemens Kownatzki Shares Expertise on How Government Could Modernize Stock Market Rules | InvestorPlace
The stock market tends to be reactive and create rules after big events occur. For example, after the stock market crash of 1929, a wide-range of federal security laws were implemented. With the advancement of new apps and financial-tech companies, Clemens Kownatzki provides his expertise on how the government could help regulate the industry. The well-known Silicon Valley Robinhood fintech company has more than 13 million investors and has created concerns on its gamification features. During the Reddit surge, many brokerage firms complained about the lack of disclosure and the restrictions on what stocks to buy and sell. As a result, several lawsuits from customers have been filed.
“No doubt, more transparency and better communication from brokerage firms will help all investors and in many ways would level the playing field for retail investors,” said Clemens Kownatzki. “Institutional investors have an information advantage, often having direct channels into brokerage firms. If you are in the camp of market efficiency aficionados, you can look at market prices as information systems. Since some market makers offer pay for order flow from brokerage firms, they have the ultimate information flow and can out-navigate any retail investor, even some of the more long-term oriented institutional fund managers.”
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