Dec. 26, 2022
December 26, 2022 Dear Gary, Allowing market participants to use a narrower spread would be great progress as it enables market participants to actually compete with dark pool/ATS/off-exchange order processing. As we all know, those trades have ZERO price discovery for the lit market and has more room to be manipulated due to it's secretive nature of not-transparancy for outsiders. By allowing more competition between on and off exchange trading, most honest participants would want to route orders to lit markets for their clients as it involves real price discovery and suuplydemand. The amount off-exchange for GameStop the past years is absolutely staggering. With the lack of competition to handle orders on the lit markets (as this rule suggests), it allowes large participants to dictate order routings as they would always be the cheapest off-exchange. This brings me back to Payment for Order Flow, with implementing this rule ASAP, it would accomplish several things as once: More trades would end up going to the lit exchanges improving price discovery. More trades going to the lit exchanges mean less trades go to ATS's which use the PFOF model. Less trades being internalized by PFOF means that PFOF prices/risks increase because of more lit exchange traffic driving price discovery. More competition and price discovery would make it harder for shady business off-exchange with underhanded pre-agreed dealings between participants (same 100 shares being offered for sale or transacted at $.0001 between the same participants) as there wuld be many more able to compete with the changed minimum price of 0.0001. Less PFOF means that brokers will have to turn to customer value and satisfaction and/or services as there will be less \"free\" income from shady ATS dealings that they are happy to participate in. This rule looks to be set to enable market participants to compete with all the off-exchange trading and give the lit market an advantage as no one wants to do business with companies that provide no price discovery on the lit market. As a retail investor in GameStop and having seen 90% of ALL trades being routed off-exchange, I'm pretty happy with this set of rules and changed minimum pricing that enables honest participants to fight and win against the large monopolist firms that just buy all traffic through their PFOF deals. There is one thing that still leaves me with questions thought: Designated Market Maker for stocks This one still makes me go \"hmm\" as all orders should be routed through the NBBS system and only then hit intitutional firms, not the other way around. Reason I say it as even when using IEX orders, they still are being routed through their DIM. Great rule and improvements Hayy christmas :)