Mar. 31, 2023
Dear SEC, I am writing to express my support for the proposed update of the disclosure required under Rule 605 of Regulation NMS for order executions. Regulation Best Execution is a necessary step in protecting household investors, and promoting fair and efficient markets, by ensuring that household investors are receiving the best possible execution for their trades. As an individual investor, I understand the importance of best execution in trade execution, particularly for those who may not understand the complexities involved in choosing how to execute a trade. It is crucial that the SEC provides clear guidance on how to read and interpret the data in Regulation NMS Rule 605 reports, especially for investors who may not have a deep understanding of the markets. 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. Conflicted orders don't belong in a Best Execution rule, and without it, customers may not be aware of revenue arrangements between brokers and subpar trading firms, or that they may be paying higher transaction prices. Different trading venues may offer different prices, and slower execution can lead to missed opportunities. Information leaks can inhibit a successful transaction, and less reliable settlement processes can delay the receipt of proceeds. 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. As evidenced by recent charges against Robinhood, Citadel, and brokers recommending mutual funds with 12b-1 fees and revenue sharing arrangements, a best execution rule is crucial to protecting household investors from subpar trading practices. I urge the SEC to prioritize the creation of a competitive market structure that benefits investors and encourages transparency, and I believe that the proposed Regulation Best Execution is a necessary step in achieving this goal. Thank you for your attention to this matter. Sincerely, T.V. Steinburg