Feb. 26, 2023
Dear Ms. Vanessa Countryman and Other Relevant Securities Exchange Commission Professionals: I am commenting on the proposed 24X National Exchange filed with the SEC for registration as a national securities exchange. I believe this application should be denied for several reasons which I will outline below. 1) 24X proposes to allow trading of securities with unlisted trading privileges 24 hours per day, 7 days per week, including holidays, per Exhibit E of 24X's application. This is concerning idea, as this exchange would have no need to be tethered to the National Best Bid Offer (NBBO) during off-market hours. This presents a structural risk to pricing in markets and puts undue power in the hands of one exchange that is proposed by Point72. 2) Point72 gets unique privileges and access to pricing data if 24X's application is approved. Owned by Steve Cohen, who has a documented history of engaging both in market manipulation and insider trading with SAC, now his new hedge fund is proposing to run an exchange via Bermuda limited liability corporation. Sounds a lot like the Bermuda LLC charter of FTX, but FTX of course was a different type of opaque exchange that also ran 24 hours a day, 7 days a week. How could the 24X National Exchange bring more price transparency to markets? I don't see how. Further, the Board of Directors of 24X will have no oversight over the exchange, except for what Point72 specifically decides for them to oversee, per Form 1, Exhibit C-2, Article 3.3 Paragraph (f) it states: "As long as Point72 holds any Units, the Company shall invite a single representative of Point72 (the “Observer”) to attend all meetings of its Board of Managers in a nonvoting observer capacity and, in this respect, shall give such Observer copies of all notices, minutes, consents, and other materials that it provides to its managers at the same time and in the same manner as provided to such managers..." Why is that observer there? To confer upon a hedge fund the ability to oversee an exchange. This is a horrible idea for reasons that should be obvious. 3) Some very curious privileges are spelled out in their application. These intriguing self-bestowed powers are outlined in Form 1 Exhibit C-2, Article 12.10: (Bold is added for emphasis) "Except as otherwise expressly provided herein, the provisions of this Agreement may be amended or waived at any time by the written agreement of the Company, the Majority Members and the Preferred Majority Members...Notwithstanding anything to the contrary, no amendment that would change the limited liability status of any Member or that would increase any Member’s capital contributions shall be made without the written consent of such Member. In addition, none of the rights specifically provided to Point72 in this Agreement may be amended or waived without the prior written consent of Point72." This statement should make it fundamentally clear that Point72 wants to have the ultimate power over this exchange. I ask everyone at SEC considering the 24X National Exchange application a simple question: how could it possibly be the SEC's charge to protect investors if the SEC also will allow a hedge fund to launch a continuously operating exchange? I urge the SEC to deny the 24X National Exchange application to operate an exchange under Section 6 of the Securities Exchange Act of 1934. Best regards, Jefferson Rich Individual Investor and Concerned Citizen of the United States