Mar. 31, 2023
I would like to express my gratitude for your efforts to enhance competition and transparency in the US equity market. As an individual retail investor, I appreciate the opportunity to provide my feedback on the proposals. The proposed enhancements for Best Execution S7-32-22 would be a significant change to the US equity market structure since the implementation of Regulation NMS in 2005. Although brokers owe their customers a duty of Best Execution, FINRA's current best execution rule needs SEC enforcement. However, I am concerned about "conflicted orders" in a Best Execution rule. If payment for order flow (PFOF) persists, then conflicted brokers will continue to direct our orders to wherever they can gain the highest profit. The UK has issued guidance stating that PFOF is a conflict of interest, which should also be implemented in the US. The Commission is proposing changes to rule 605 of Regulation NMS to include more information about broker executions. Currently, brokers have to file 606 reports quarterly. However, FINRA, along with the SEC, has raised risk alerts in Dec 2022 regarding the lack of compliance with the 606 reports. Their findings consist of firms publishing inaccurate information in the quarterly report on order routing, which would lead to incomplete disclosures. Although the proposed Order Competition Rule S7-31-22 aims to give investors access to the best-priced quotations in the national market system, I am concerned that brokers may charge high commissions or fees in lieu of PFOF. A cap on the amount of commissions or fees that brokers can charge would be ideal. Finally, I support the establishment of a variable minimum pricing increment model for Tick Sizes, Access Fees, and Transparency of Better Priced Orders S7-30-22. I would prefer that the fees be reduced to zero, but 0.001 would suffice. I hope my feedback is of value to you, and I look forward to the SEC's decision. Thank you for your time and effort. Sincerely, Andrew Buck