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Market Structure Brief: Three Issues in the Spotlight Following the Meme Stock Spectacle

This paper briefly addresses three issues at the forefront of policymaking in the wake of the “meme stock” trading frenzy that roiled the U.S. equities market in January 2021. In particular, there are questions about the potential conflicts of interest in the payment for order flow system, transparency of short positions and whether to shorten the two-day delay in trade settlement. While this report does not endorse any particular policy actions, it reviews some of the reasons these issues have emerged or resurfaced, and how changes could impact markets positively or negatively.