Apr. 01, 2023
Dear SEC, I am writing to express my support for File No. S7-29-22; Release No. 34-96493· Disclosure of Order Execution Information. I believe that this proposed rule is necessary to protect household investors and promote fair and efficient markets by ensuring that they are receiving the best possible execution for their trades. Best execution is essential in trade execution, especially for individual investors who may not understand the complexities involved in choosing how to execute a trade. Brokers owe their customers a duty of Best Execution derived from common law agency principles and fiduciary obligations. However, it needs to become a rule that the SEC can enforce to ensure that brokers are acting in the best interest of their customers. I urge the SEC to provide clear guidance on how to read and interpret the data in Regulation NMS Rule 605 reports, especially for retail investors who may not have a deep understanding of the markets. Different trading venues may offer different prices, slower execution can lead to missed opportunities, and less reliable settlement processes can delay receipt of proceeds. Without the best execution rule, customers may not be aware of revenue arrangements between brokers and subpar trading firms or that they may be paying higher transaction prices. Conflicted orders don't belong in a Best Execution rule. Quarterly reviews of execution quality would provide transparency and accountability for the broker-dealers' practices. The proposed rule would provide a more detailed and comprehensive standard for broker-dealers to follow, resulting in consistently robust best execution practices. I would like to draw your attention to the cases of Robinhood and Citadel, which were charged by the SEC for failure to satisfy their best execution obligation, resulting in a significant loss of money for their customers. Robinhood made misleading statements and did not disclose payments received for routing trades to specific firms. Citadel paid the SEC $22.6 million in 2017 to settle best execution charges for executing customer trades at less favorable pricing when a better price was available. Brokers recommending mutual funds with 12b-1 fees and revenue sharing arrangements with clearing brokers have also faced best execution charges from the SEC. In conclusion, I strongly support the proposed regulation, and I believe that it is a necessary step in protecting household investors and promoting fair and efficient markets. I urge the SEC to implement this proposed rule as soon as possible to ensure that all investors receive the best possible execution for their trades. Thank you for considering my views.