Subject: Re: SEC Proposal on Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders (No. S7-30-22)
From: Gustavo Fernando Moro Martins de Sa
Affiliation:

Mar. 07, 2023



Dear SEC,
 
I’m a concerned household investor. I’ve been seeing so much corruption in the markets these past few years, but only because I’ve been looking. And I’m appalled that things are the way they are. And I hope you can do something about.
 
Movies and fiction have led me to believe that the SEC was super powerful and a force to be feared and reckoning by the evil doers; but reality has shown otherwise. What good is a rule if the enforcement is lacking? How do you deter criminals if the fines are so low they are not even seen as cost of doing business? 
 
What good is fining a broker-dealer over and over if the amount they obtain via their crimes is order of magnitudes higher? How much can they get away with until it’s enough? Or is it never enough? There’s no honest mistakes; there’s only ill intent.
 
I don’t care for “free” brokerage, because I know it’s not free; the brokers and market-makers who are handling my orders are more than making up for the “free” part by trading ahead of me, against me, and doing all kinds of crimes that you are well aware of.
Specially I do not want to see my orders being routed through a wholesaler that has been charged over 70 times by the United States government (https://files.brokercheck.finra.org/firm/firm_116797.pdf). Who would want that? No investor in their right mind. 
 
I would *gladly* pay whatever commission was needed to ensure my orders are routed through people who at worst are neutral and at best have my interests in mind. My actual interests, not the grandstanding and gaslighting of “my interests” that wholesalers like Citadel Securities claim.
 
And speaking of orders and markets, how is it that some exchanges have a special treatment compared to others? Why are tick sizes not harmonized across all exchanges? This is not a free market. This leads to monopolies being built, looking at every possible advantage to extract more money from household investors. Why don’t all exchanges have to quote and trade in the same increments? Why allow some to get away with special privileges? This is not a fair market. Every exchange should have the same conditions, and let them compete with each other on the strength of their services alone. Don’t give any of them a leg up.
 
And then we get into rebates and other assorted inducements; these are just ways to get around payment for order flow limitations. Payment for order flow, by the way, should not exist. No-one should be allowed to skim off of the trades that household investors do. This is the norm in European markets. So it should be in the United States.
 
Then we get into the issue of language. Language in the rules and regulations need to be absolutely tight. There should be no question as to how the rules are supposed to be applied. And the reasoning is simple; criminals have access to extremely well paid lawyers. Lawyers who can scour those rules for even the slightest loophole, and get their clients off scot-free from scamming household investors to the tune of billions of dollars, and affecting the legitimacy of the market as a role. No vague language, please.
 
I also wholeheartedly approve of and support the inclusion of odd lot information in the SIP. The Commission has done  some good work in providing individual investors with more detailed information so that we are able to make better investing decisions (not only on stocks, but also on the exchanges and brokers we would use). Odd lot information is paramount. No more invisibility to bids and offers of many orders on the markets. As such, excluding it from the NBBO is a huge issue. Most of the trades in the market are made up of odd lots; with some stocks, they’re nearly *exclusively* odd lots. Removing them means removing the power from individual investors and giving hedge funds and bad actors the complete power. Is that fair? Is that the market you want? 
 
Concluding, keep doing the good work and go after these criminals. Make the penalties harsher, and make them stick. What good is finding someone hundreds of thousands of dollars if they profited dozens of millions? The punishment must fit the crime. Criminals must fear the SEC, as they do in the media. Only then will American markets begin to become fair and truly free, and confidence in the markets (and by extension, the economy) can be recovered. Do the right thing. None of us household investors are falling for the gaslighting of hedge funds masquerading as exchanges, brokers, market makers, wholesalers; and neither should you. They do not speak for us, and they do not have our best interests in mind.
 
Do the right thing.
 
Sincerely,
-Gus