Apr. 01, 2023
April 1, 2023 Dear SEC, I would like to briefly express my support for this rule's proposed intent to enforce legal requirements around best execution and mandate more transparent disclosure of Citadel and Virtu's practices in order to prevent misleading statements from being made and instead let key data points do the talking for the observing public. The truth is, a lot of talk goes around regarding best execution but talk is cheap. No one proves this more than Citadel, who in 2017, paid the SEC $22.6 million to settle best execution charges when they executed customer trades at subpar pricing while better prices were right in front of them. Later in December of 2020, a full month before the Gamestop controversy of 2021, the SEC charged Robinhood with failure to satisfy its best execution obligation. The total amount that Robinhood cost its customers was $34.1 million. There's also a history of brokers recommending mutual funds with 12b-1 fees and revenue sharing arrangements with clearing brokers who have also faced best execution charges from the SEC. Brokers have a fiduciary duty in providing Best Execution to their customers, but until a formal rule set in place and actively enforced by the SEC takes form, we will continue to see cases like the above where players like Citadel, Robinhood, Virtu, and others can talk the talk and not walk the walk when it comes to providing for their customers. The worst part is, these customers who are being fleeced for millions don't even know in most cases until the SEC is charging the parties at fault. Without the best execution rule, customers may remain in the dark when it comes to revenue arrangements between brokers and their partners, and they'll continue to invest blindly without the slightest idea that they may be actually paying higher transaction prices. Because really - who's going to let them know? The actions that the SEC takes now will hopefully bring this activity to a screeching halt as clearer expectations are set on how to read and interpret the data in Regulation NMS Rule 605 reports, especially for household investors who may not have a deep understanding of the markets. Best execution is pivotal in trade execution for individual investors who may not understand the complexities involved in choosing how to execute a trade. To bolster these efforts, I would like to suggest the SEC hold quarterly reviews of execution quality in order to provide transparency and hold broker-dealers accountable for their practices. I would like to conclude by saying I am ecstatic for best execution to really mean something, and not just exist as a part of the boilerplate jargon firms use when claiming they represent me while their actions prove otherwise. Best execution needs to be objective, best execution needs to be quantifiable, and it deserves to be. Thank you for the opportunity to comment my feedback, it is truly appreciated.