Mar. 06, 2023
To the SEC commissioners and Staff: Every rule the SEC passes is only as good or helpful as the enforcement that backs it. I want to see much higher fines that actually serve as a significant deterrent to violation of rules and regulations. The problem with small fines, is that they effectively serve no purpose and are not a deterrent to violation, and it normalizes the infractions as merely the cost of doing business, and for the institutions in question, its such a low cost, that it would be irrational for them to not take advantage of these effective loopholes. I will give you an example that illustrates my point. If the fine that was levied for parking in a handicap parking spot was a penny, in the absence of having a valid handicap parking placard, and this was the only repercussions of doing so, then you can be assured that these spaces would be ineffectively protected and would routinely be taken by people who are not disabled because the inconvenience of paying a penny is insufficient to modify their behavior. For this reason, we need enforcement and fines with real teeth, that should actually work towards keeping financial institutions in line. It is negligent to do anything less and its time to take charge. This is within the purview of the SEC and in order to protect our markets this fundamental shift needs to be made. I fully support the harmonization of tick sizes across all exchanges. I was shocked and demoralized to learn that some exchanges get special treatment and are able to leverage that privilege to build monopolies in some areas of the market. All exchanges should have to quote AND trade in the same increments, no exceptions. Some exchanges should NOT be granted an unfair advantage over others, for any reason. It leads to monopolistic control of parts of the market that counteract and eventually kill the positive benefits of competition. The markets are supposed to be fair - so make them fair. This is a no-brainer. Furthermore, I protest the idea of rebates and other inducements in the marketplace - this is a work around equivalent to payment for order flow, which is a harmful practice that is used by market makers to leverage an unfair advantage over retail or household traders. I would prefer you reduce access fees to zero; no "take". I strongly support the tick size regime proposed by the Commission, and I furthermore support any structure that is crystal clear and does not include vague language. As an example, if a financial firm requested something along the lines of "has a reasonable amount of liquidity at the NBBO", which effectively translates to "I can ignore the rule if I feel my lawyers can help me get away with it". Such Loose and ambiguous language only serves to make enforcement difficult or impossible, and it wastes taxpayer dollars on needless litigation time. This is unacceptable and avoidable. Clear language and an unambiguous tick size rule structure are strongly preferred and necessary. If you take one thing away from this comment it is this: Please do not include vague language in the application of your rules, or else they are not actually rules at all. Additionally, I believe the exclusion of odd lots from the NBBO is a huge problem. Odd lots are now a majority of trades in the markets. Within some stocks, they are the vast majority of trades. Therefore, the exclusion of odd lots from the price of a stock effectively amounts to the exclusion of most individual investors - most of the voting public. Ask yourself, how is the public served by this? Please look into a way to fairly and proportionately include odd lots in the calculation of the NBBO. Thank you in advance for your careful consideration of these comments. Please know that myself and other concerned household (formerly known as "retail") investors are reaching out to you in good faith that our voices will be heard. The financial institutions are looking out for their bottom line, but SEC is an agency set up to protect people, not financial institutions. Furthermore, history is not lacking for examples of financial institutions operating in ways that harmed the general public, so their comments and their behaviors need to be scrutinized. Sincerely, Nathan Lewandowski M.D.