The SEC relaxed its intraday trading restrictions, causing the stock prices of trading platforms such as Robinhood (HOOD.US) to collectively surge.

On Wednesday, with the approval of a key rule change by the U.S. Securities and Exchange Commission (SEC), lowering the day trading threshold for retail investors, the stock prices of several trading platforms targeting individual investors collectively rose. Among them, Robinhood (HOOD.US) rose nearly 9%, Webull (BULL.US) rose over 10%, eToro Group (ETOR.US) rose over 5%, and Coinbase (COIN.US) rose over 3%. The rule change was proposed by the American Financial Group, Inc. regulatory agency and revolves around eliminating the minimum capital requirement for "Pattern Day Traders." Previously, if investors made four or more day trades within five trading days, they were required to maintain at least $25,000 in their margin account to continue trading. The new rule eliminates this fixed threshold and instead requires that investors' account equity matches their trading risk exposure. This change is seen as significantly lowering the barrier for retail investors to engage in high-frequency trading and is expected to attract more individual investors. The SEC stated that the rule was approved to accelerate the process, showing the regulatory body's supportive stance towards market activity. Traditional brokerage firms also benefited. Morgan Stanley (MS.US), which has a wealth management business, saw its stock price rise by 5.1%, Charles Schwab Corp (SCHW.US) rose 1.28%, and Interactive Brokers Group, Inc. Class A (IBKR.US) rose 2.6%. Analysts point out that the relaxation of the rule will increase market liquidity and trading activity, directly benefiting platforms focused on retail clients. However, some also believe that lowering the threshold may increase short-term trading risks, and in the future, regulators will need to strike a balance between market activity and investor protection.