Mar. 31, 2023
To Whom It May Concern, I am writing today as an individual investor to support the proposed Disclosure of Order Execution Information rule. Best execution is important in trade execution for all traders, but it is especially important for individual investors who may not understand the complexities involved in choosing how to execute a trade. Brokers owe their customers Best Execution derived from common law agency principles and fiduciary obligations, but Best Execution needs to be a requirement that the SEC can enforce. Without the best execution rule, customers may not be aware of rebate or other arrangements between brokers and subpar trading firms or that they may be paying higher transaction prices. I was surprised and very disappointed to learn this was even possible when I began learning more about the intricacies of the U.S. markets. Failures to satisfy best execution obligations are far from rare. In December 2020, Robinhood was charged by the SEC with failure to satisfy its best execution obligation, resulting in an aggregate loss of $34.1 million for its 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 favourable pricing when a better price was available. How much did Robinhood and Citadel profit from their customers' losses in these and presumably other instances? 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. The proposed Regulation Best Execution is a much-needed step in protecting individual investors and promoting fair and efficient U.S. markets by ensuring ALL investors receive the best possible execution for their trades. Please implement this rule with fines sufficiently high to serve as a deterrent to potential violators lest they simply become the cost of doing business. Catherine Wells