Mar. 07, 2023
Dear SEC, I am writing to express my support for your proposed rule on Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders. I believe this rule will enhance trading opportunities for all investors and help ensure that orders placed in the national market system reflect the best prices available for all investors1. I am concerned about the current state of the market, where some broker-dealers and wholesalers have been repeatedly charged with violating securities laws and regulations2. I think these entities should face higher fines and stricter penalties that actually serve as a significant deterrent. I also think some broker-dealers should lose their licenses instead of receiving fines that amount to nothing more than a cost of doing business - a cost that is often outweighed by the ill-gotten gains obtained through “honest mistakes”2. I would gladly pay more per share or commission to avoid being routed through a wholesaler that has a long record of flouting the law like Citadel Securities2. I want my orders to be executed at the best available price, not at a price that benefits the wholesaler or broker-dealer at my expense. I also want to have more information about how my orders are handled and where they are executed. That is why I fully support the harmonization of tick sizes across all exchanges. I was shocked to learn that some exchanges get special treatment and are able to leverage that special treatment to build monopolies in some areas of the market3. All exchanges should have to quote AND trade in the same increments. Some exchanges shouldn’t be granted an unfair advantage over others. 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 fair2. I also dislike the presence of rebates and other inducements in the marketplace - they are simply payment for order flow by another name. I would prefer you reduce access fees to zero; no "take"2. This would eliminate conflicts of interest and incentives for routing orders based on payments rather than best execution. I support the tick size regime proposed by the Commission, and would also support any structure that is clear and does not rely on vague language2. For example, some funds and firms might request language like “has a reasonable amount of liquidity at the NBBO”, which translates to "I can ignore the rule if I feel my lawyers can help me get away with it"2. Loose language makes enforcement difficult or impossible, and wastes taxpayer dollars on needless litigation time. Clear language and a clear and unambiguous tick size rule structure are strongly preferred. Please do not include vague language in the application of your rules. I support the inclusion of odd lot information in the SIP, and applaud the Commission’s efforts to provide individual investors with more information with which to make better investing decisions - especially concerning which firms are allowed to handle our orders14. Two years ago, the majority of trades in the markets were odd lots (55%; from https://bettermarkets.org/newsroom/key-highlights-dennis-kellehers-testimony-march-17-house-financial-services-gamestop-hearing/)2. For certain tickers, this proportion is certainly much higher. Why are the bids and offers of so many orders kept invisible? If the Commission were to remove odd lot information from this rule, my faith in the U.S. markets would become even more damaged than it already is. I believe the exclusion of odd lots from the NBBO is a problem. Odd lots are now a majority of trades in the markets. Within some stocks, they are the vast majority. The exclusion of odd lots from the price of a stock amounts to the exclusion of most individual investors - most of the voting public. Please look into a way to fairly and proportionately include odd lots in the calculation of the NBBO2. In conclusion, I urge you to adopt this rule as soon as possible. It will improve market quality, fairness, and efficiency for all investors. It will also prevent further harm from unscrupulous actors who exploit loopholes and asymmetries in information and power. It will restore trust and confidence in our capital markets, which are vital for our economy and society. Thank you for your consideration.