Benjamin Schiffrin is Director of Securities Policy, Better Markets

What are your expectations for 2025?

The SEC will abandon Chair Gensler’s rulemaking agenda and instead allow the industry to continue to pursue policies that harm retail investors. So instead of a rule that requires brokers to get the best prices for their customers, brokers will continue to be able to evade any duty to seek best execution of their customers’ orders. Instead of a rule that requires broker-dealers and investment advisers to have policies and procedures regarding cybersecurity, investors will be vulnerable to cyberattacks. And instead of a rule that regulates the way broker-dealers and investment advisers use artificial intelligence, broker-dealers and investment advisers will be able to use artificial intelligence in a manner that puts their interests ahead of the interests of the investors they are supposed to serve. Essentially, the SEC will usher in an era of deregulation.

What trends are getting underway that people may not know about but will be important?

One trend is the marketing of alternative assets such as private credit to retail investors. Traditionally, the private funds industry has been unable to sell its products to retail investors because retail investors are unable to fend for themselves without the disclosure requirements that exist in the public markets. But there is now a push to sell products like private credit ETFs, which could be sold to retail investors and that would expose retail investors to private credit. Private credit funds would be composed of loans that are illiquid and hard to value, which would make them risky for retail investors.

Another trend is the push for 24/7 stock trading. New securities exchanges, such as 24X, and established securities exchanges, such as the New York Stock Exchange, both want to expand trading hours so they are open around the clock. This would allow retail investors to buy and sell stock in the middle of the night. The problem is that investors will receive worse prices for their securities trades during overnight sessions. The industry will also be able to use artificial intelligence to induce investors to trade at all hours of the day through push notifications and other behavioral prompts. Given that it is human nature to engage in riskier behaviors at night, 24/7 trading has the potential to cause investors to trade excessively and even to become addicted to trading. This concern is not theoretical, as the ability to bet on sports 24/7 is fueling a gambling addiction epidemic. And an underreported element of crypto—aside from its prevalence in frauds, scams, and abuses—is that crypto trading addiction is so prevalent due to the ability to trade crypto around the clock that there are now addiction centers that specialize in it.

What industry trends have been prominent but are now fading (or will soon fade)?

Investors have been demanding more information about the role of environmental, social, and governance (ESG) factors in their investments, and although that is unlikely to change, the efforts to get investors this information are likely to fade. The SEC is unlikely to finalize its proposed rule to require funds to disclose how they use the ESG factors. One of the purposes of the rule was to prevent greenwashing—the practice of funds promoting their use of the ESG factors in a manner inconsistent with their actual use. Any failure to provide investors with information about how funds actually use the ESG factors is shortsighted. Funds that prioritize the ESG factors will continue to exist, as will funds that misrepresent how they use the ESG factors. All the absence of a rule will do will be to leave investors in the dark and make their investment decisions harder.

Lisa B. Saacks is President, Trillium Surveyor.

What were the key theme(s) for your business in 2024? 

The key theme for our business in 2024 was navigating the complexities of evolving market conditions to ensure traders operated in a fair, transparent, and efficient environment. 

The expansion of overnight trading presented unique challenges, particularly around managing risks associated with low liquidity and potential market disruptions. For traders, this underscored the importance of maintaining dynamic and adaptable surveillance thresholds to keep pace with the rapidly shifting market landscape. 

Another critical focus was addressing the risks posed by low-price, low-volume securities, which drew heightened regulatory scrutiny due to their vulnerability to manipulative schemes like pump-and-dump tactics. With a notable increase in enforcement actions against firms failing to monitor trading in these securities, the need for robust, proactive trade surveillance became a top priority for ensuring compliance and maintaining market integrity. 

More broadly, the regulatory environment has evolved across asset classes, and we received more questions than ever on how our trade surveillance and reporting solutions can elevate the capabilities of internal compliance teams. With comprehensive detection filters, full depth-of-book market data, and new self-service features, the Surveyor platform offers a robust set of tools for effective risk mitigation. In addition to ensuring their compliance, these capabilities enabled our clients to adopt new asset classes and strategies with minimal disruption to existing compliance workflows. 

What was the highlight of 2024? 

The SEC’s adoption of amendments to Rule 605 of Regulation NMS in March was an important regulatory action this year. This update was aimed at enhancing transparency in order execution for NMS stocks, effective as of June 14, 2024, and with a compliance deadline of December 14, 2025. 

The amendments brought significant updates, including the expansion of reporting requirements to include broker-dealers managing 100,000 or more customer accounts. This broadens the scope of entities responsible for disclosing execution quality. Additionally, the definition of “covered orders” was revised to encompass orders submitted outside regular trading hours, those with stop prices, and non-exempt short sale orders, ensuring more comprehensive reporting. 

The amendments also introduced order categorization based on notional dollar value and order type — fractional shares, odd lots, or round lots — enhancing the accuracy of order size representation. Moreover, new execution quality metrics, such as average effective over quoted spread and size improvement statistics, were introduced to provide deeper insights into execution quality. 

Finally, the new requirement for firms to provide publicly accessible summary reports on execution quality is another move toward greater transparency, empowering investors to make informed comparisons.  

What are your expectations for 2025? 

We anticipate that heading into 2025, the crypto market is poised to be a high-volume, high-volatility environment. To enable traders to operate effectively in this dynamic space, robust trade surveillance is essential. We’ve recently partnered with Kaiko, which provides high-quality crypto market data. Additionally, the expansion of our coverage in Europe reflects our dedication to providing comprehensive tools that address the unique needs of both traders and investors.  

Similarly, we’ve observed a growing regulatory focus on non-equity asset classes, particularly fixed income, prompting us to prioritize enhancements to our surveillance capabilities in these markets. Other areas of focus include expanding our best execution offerings and providing targeted support for RIAs and buyside firms—two groups that are navigating heightened regulatory scrutiny and an increasingly complex trading environment.  

Within the wider regulatory landscape, we foresee changes poised to deeply influence market participants, with a particular emphasis on enhancing oversight and addressing the challenges of dynamic and evolving work environments. Additionally, FINRA’s proposed fee increases for broker-dealers, scheduled to phase in over five years starting in 2025 through 2029. While most changes will take effect in 2026, the initiative underscores FINRA’s commitment to enhancing its regulatory and oversight capabilities by securing additional financial resources.