Could Robinhood Lose Its Main Source of Revenue?
The Biden administration has made it clear that consumer protection will be an early priority. In recent months, the Department of Justice shut down a megamerger between Aon and Willis Towers Watson; put Visa and PayPal Holdings under the microscope for their transaction routing; and brought in critics of big tech to lead the DOJ's antitrust division.
Another area under regulatory scrutiny is payment for order flow, with SEC Chairman Gary Gensler telling Barron's he was considering banning the practice. Such a ban would have a significant impact on brokers like Robinhood Markets (NASDAQ: HOOD), which generates a substantial portion of its income by selling its order flow. Any potential ban would also impact market makers or wholesale firms that rely on order flow data to run their business, such as Virtu Financial (NASDAQ: VIRT).
Source Fool.com
