What happened:
On May 1, 1975, the Securities and Exchange Commission eliminated fixed commission rates in the brokerage industry. It marked a watershed moment in the financial services industry where fixed rates were deregulated. History refers to it as May Day.
The big picture:
The mandated commission structure made stock trading prohibitively expensive for most people. Eliminating those fixed commissions essentially dismantled the inequity that existed in the markets, paving the way for access that had never existed before.
What people said:
Few could predict what was going to happen. The predominant sentiment at the time was that deregulation would likely either be a “non-event,” as the New York Times wrote, or that the old-guard firms might even raise commissions.
What actually happened:
- Some of the biggest players on Wall Street opted to raise prices for the individual investor and drop them for large institutions.
- Chuck Schwab chose to instead lower commission fees, strengthening competition in the industry and expand choice and access to investing.
- In many ways this choice marked the advent of the individual investor and expanded access to investing.
May Day is now National Investing Day:
May 1, 2025 is the 50th anniversary of May Day and commemorates this turning point in our industry. It’s an opportunity to recognize that a pivotal moment that continues to shape the future of investing.
National Investing Day is about education and empowerment for the investor in us all.
More from Charles Schwab
The action that forever altered investing
Why investor sentiment matters
