Mar. 31, 2023
Ms. Countryman, the Commission is proposing changes to rule 605 of Regulation NMS to include more information about broker executions. I overall support the proposed rule changes. Currently, brokers have to file 606 reports quarterly. In Dec 2022: FINRA, along with the SEC, sent out risk alerts regarding the lack of compliance with the 606 reports. In the report FINRA cited a list of issues with the 606 reporting compliance. The findings consisted of firms publishing inaccurate information in the quarterly report on order routing. There were also issues with Incomplete Disclosures – Not adequately describing material aspects of their relationships with disclosed venues in the Material Aspects disclosures portion of the quarterly report. While I do support the idea and definitely agree with the need to be more transparent, one would expect brokers to be as non-compliant with the new 605 reports, and this will provide little to no benefit to household investors. The 605 reports are only as useful as the accuracy of data it contains. Again, these rules would have to be appropriately enforced. As compliance to date has been embarrassingly low, the Commission should make it a priority to increase fines and penalties for violations. The lack of compliance with 606 reports communicates a tendency for funds and firms to send out bad data to obscure their own situation. Companies that sell market data are then damaged, as faith in the markets overall are damaged. Why pay for data if it’s full of lies? The proposed Regulation Best Execution is a necessary step in protecting household investors and promoting fair and efficient markets by helping to ensure that household investors are receiving the best possible execution for their trades. Thank you for the opportunity to comment. Sincerely, Till Firlus Individual Household Investor