Mar. 31, 2023
I have the following recommendations regarding this rule proposal: The SEC should enhance the transparency of order routing practices by brokers and wholesalers to mitigate conflicts of interest, thereby ensuring that investors have access to the best available NMS quotations. The proposed changes to ATS regulations, which seek to align with the regulatory frameworks for exchanges, would be advantageous to individual household investors. ATS should furnish detailed disclosures pertaining to their operations, including their order routing practices, conflict management policies, and customer order handling practices, thereby promoting investor understanding of ATS operations and order execution. ATS should adopt written policies and procedures to avert fraudulent and manipulative practices, which would safeguard individual investors from abusive practices in the ATS market. ATS should furnish comprehensive data on their systems' operation, including execution of orders, order routing practices, and the use of dark pools, to the SEC, thereby facilitating effective oversight of ATS and ensuring adherence to regulatory requirements. ATS should operate consistently with the broader regulatory structure of securities markets to ensure equitable and transparent trading practices that ultimately benefit individual investors. ATS should implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, which would promote transparent and fair pricing across all trading venues, thereby benefiting investors. The proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks is essential for ensuring fair pricing across all trading venues, which, in turn, ensures a level playing field for all investors. Individual household investors support initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Investors should have more options than sending orders to a wholesaler for internalisation. Brokers may charge excessive commissions or fees instead of PFOF; therefore, a cap on such fees is necessary. The proposed changes are expected to result in estimated savings of $1.12 billion to $2.35 billion for retail investors, primarily by increasing liquidity competition for marketable orders. A competitive market structure is essential for regulating markets better, and impediments to competition, such as PFOF's conflicted nature, should be eliminated. The SEC should prioritize creating a market structure that fosters competition, benefits investors, and promotes transparency. Thank you, William Jacob Pennstrom Retail Investor