Mar. 30, 2023
Dear SEC, I am writing in support of the proposed rules regarding Best Execution and Alternative Trading Systems (ATS). Regarding the proposed Best Execution rule, I believe it is essential to ensure that individual investors receive the best possible execution for their trades. As retail investors may not understand the complexities involved in trade execution, clear guidance on how to read and interpret the data in Regulation NMS Rule 605 reports should be provided. Brokers owe their customers a duty of Best Execution, and it is necessary to become a rule that the SEC can enforce. Conflicted orders do not belong in a Best Execution rule, and without it, customers may not be aware of revenue arrangements between brokers and subpar trading firms, leading to higher transaction prices. Quarterly reviews of execution quality would provide transparency and accountability for the broker-dealers' practices. The proposed rule would provide a more detailed and comprehensive standard for broker-dealers to follow, resulting in consistently robust best execution practices. Additionally, the proposed Regulation Best Execution is a necessary step in protecting household investors and promoting fair and efficient markets. Regarding the proposed changes to ATS rules, increasing transparency in the routing of orders by brokers and wholesalers is crucial to reducing conflicts of interest. ATS should submit detailed disclosures about their operations, including how they manage conflicts of interest, how they operate their order routing practices, and how they handle customer orders. ATS should also establish and enforce written policies and procedures to prevent fraudulent and manipulative practices, protecting individual investors from abusive practices in the ATS market. ATS should provide detailed information about the operation of their systems to the SEC, improving the SEC's ability to oversee ATS and ensure compliance with regulatory requirements. The proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks would promote fair pricing across trading venues, essential for ensuring a level playing field for all investors. Competition in the marketplace is necessary to regulate markets better, and barriers to competition, such as the conflicted nature of PFOF, should be removed. The SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. Thank you for your consideration of these important issues. Sincerely, Taylor Sizemore