Mar. 8, 2023
Dear friends of the SEC, As referenced in the subject line, this message serves a comment for SEC Proposal No. S7-30-22. In general, each rule the SEC passes is only as useful as the degree to which it is enforced. I want to see higher fines that actually serve as a significant deterrent. These fines should not be a simple “cost of doing business.” They should reverse all gains firms have made by skirting SEC regulations AND include exemplary damages to deter future violations. In extreme cases, broker-dealers should lose their licenses instead of receiving fines. Broker-dealers and other large firms have expert lawyers to find their way around SEC regulations. As such, claiming violations to be an “honest mistake” is simply acting in bad faith. I support the tick size regime proposed by the SEC, especially any structure that is clear and does not rely on ambiguous language that could be contested in court. Unclear or loose language makes enforcement difficult or impossible, and wastes taxpayer dollars on needless litigation time. Clear language and a specific and unambiguous tick size rule structure are strongly preferred. Please do not include vague language in the application of your rules. I would gladly pay commission to avoid being routed through a wholesaler, especially one with a long record of flouting the law like Citadel Securities. The fact that a vast majority of household investors don't understand how wholesalers are profiting off their hard-earned savings is a major problem with our markets. (https://files.brokercheck.finra.org/firm/firm_116797.pdf). 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 market. 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 fair. I dislike the presence of rebates and other inducements in the marketplace - they are simply payment for order flow by another name. I request that the SEC reduce access fees to zero. 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 orders. 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/). 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 NBBO. I applaud the Commission's efforts to improve our markets and look forward to further action and enforcement to that end. -- Zachary O'Neill