SEC considering tune up to "market plumbing" after meme stock craze

• "Today, the Commission is proposing several amendments to the securities clearing and settling process — what one might call the 'market plumbing,' " Gensler said.
• "I share the frustration of investors who were locked out from making certain trades," he added.

Between the lines: Right now it takes two days for a trade to clear, known as T+2. Meaning, if you sell a stock or convert a currency on Monday, you get the cash on Wednesday.

• This move would get the markets to T+1: Sell today — get paid tomorrow.
• If accepted, the proposal would take effect by March 31, 2024, the SEC said in a release today.
• In the future, we could see T+.5, the SEC said it is seeking comments on a same-day settlement cycle.

Why it matters: The less time it takes to clear trades, the less risk there is in the system. In a release today, the SEC cites two recent moments of volatility from the past couple of years, as examples:

• The Gamestop trading mania, which caused headaches for Robinhood largely because of T+2, as Felix Salmon explained here.
• The March 2020 COVID-related crash.

The big picture: This would be "the Wall Street regulator’s most direct response yet to last year’s wild trading in GameStop Corp. and other meme stocks," Bloomberg reported last week.

• The SEC is busy today, also proposing new transparency rules for private equity.

Go deeper: Wall street speeds up, slowly

Editor's note: This article has been updated with new details from Gensler's remarks.