Apr. 01, 2023
Dear Gary Gensler, the SEC, and the general public, I am writing to provide my comments on the four proposals presented by Chairman Gary Gensler for equity market structure reform. While these proposals are a step in the right direction, there are several concerns I would like to address that are crucial for safeguarding the interests of individual investors in today's complex and fast-paced trading environment. Failures to Deliver: The SEC should take measures to reduce the prevalence of failures to deliver, which can contribute to market manipulation and disrupt the efficient functioning of the market. Strengthening the rules surrounding short selling and providing better oversight on naked short selling would mitigate this issue and protect individual investors. Multiple Markets: Currently, stocks are available on multiple trading venues, including off-exchange venues like dark pools and other alternative trading systems. This fragmentation leads to reduced transparency and may hinder individual investors' ability to achieve best execution. The SEC should consider reviewing the practices of such venues and enforce stricter rules to promote transparency and fairness across all trading platforms. Consequences for Rule Violations: It is important to ensure that market participants who bend or break the rules face significant consequences. This would deter potential wrongdoers and create a fair and equitable market environment. Increasing the penalties for non-compliance and establishing more proactive enforcement mechanisms would help accomplish this. Best Execution: While the proposal for a best execution standard and framework is commendable, the SEC should ensure that the definition of best execution encompasses more than just the lowest price. It should also take into account factors like speed, likelihood of execution, and overall costs associated with a trade. This would better align broker-dealers' interests with those of individual investors. Order Competition: The proposed rule on order competition is beneficial, but it should be extended to cover all types of orders, not just marketable orders from individual investors. A more comprehensive approach would foster a competitive and fair market environment that benefits all participants. In conclusion, the proposed equity market structure reforms are a welcome effort to modernize our market system. However, addressing the aforementioned concerns will be essential to truly level the playing field and protect the interests of individual investors. Thank you for your consideration. Sincerely, Trevor Panhorst