Aaron Brown, Columnist

Crypto Offers a Road Map for Improved Stock Trading

The SEC’s proposal to overhaul how transactions are conducted reads like the invention of lawyers and economists who can’t see the easy fix that exists right before their eyes.

December 19, 2022 at 11:00 AM UTC

By Aaron Brown

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

Stock trading can be improved.
Photographer: Spencer Platt/Getty Images

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The dispiriting thing about the Securities and Exchange Commission’s 400-page proposal to re-engineer financial markets, and the response from outside the agency, is that lawyers and economists are arguing over questions that have easy technical solutions. If we wouldn’t trust these people to design the electrical power system or build a spaceship to Mars, why should we listen to them on market rules?

One basic issue the SEC is trying to address is how best to match buyers and sellers. The goal is not controversial: The person willing to pay the most should buy from the person willing to sell for the least amount, and these transactions should continue until every holder of the asset values it more highly than anyone who doesn’t hold it.