Fed Cuts, SEC Reform and the Perfect Negroni
On Wednesday, the SEC took another major step forward in modernizing US equity markets addressing the outdated penny spread limits. This marks the second phase of its four-part reform package introduced back in 2022. The SEC starting November 2025, will reduce the "tick size"—the difference between buy and sell prices—from one cent to half a cent for certain high-liquidity stocks. This change will apply to stocks priced above $1 and is primarily aimed at reducing trading costs for investors. However, it may impact brokers who profit from wider spreads. To balance this, the SEC has also cut access fees by two-thirds.
The initiative is part of SEC Chair Gary Gensler’s push to create a fairer and more transparent market. While this is a significant shift, it’s not without challenges, and it has drawn criticism from major exchanges like the NYSE and Nasdaq who aren’t happy with the change saying the rules “will impose serious harm to the long-term strength of the US equity market” ultimately, increasing costs for investors and issuers. The buy-side for its part, likes the new rules suggesting it will improve liquidity, efficiency and lower costs.
The agency has faced legal pushback on various reforms over the years, from short-selling disclosures to climate data requirements signaling potential court battles may lie ahead. For CEOs and IROs, this highlights the importance of staying nimble. As the regulatory landscape continues to evolve under Gesler’s tenure, companies should strategically position themselves in a market increasingly focused on transparency and efficiency.
As tipplers around the world celebrate Negroni Week (Sept. 16-22), it’s the perfect time to reflect on the simplicity of balance—both in the market and in our glasses—and toast the Fed’s recent rate cut alongside the SEC’s focus on investors. Much like a Negroni, where the bitters and gin offset each other (as Orson Welles noted, “The bitters are excellent for your liver, the gin is bad for you.”), these moves strike a balance between investor benefits and business interests.
So, as we applaud market reform and interest rate cuts this week, let’s raise a glass to the timeless ruby red Italian charmer, the Negroni. Salute!
P.S. To enjoy a Negroni at one of more than 6,000 participating bars and restaurants donating all or a portion of its drink sales to charitable causes visit: Negroni Week Bar Finder. Last year, they raised more than $320,000 for charity, and this year, expect to double sales—that’s how much people love this delicious famous cocktail.
