Mar. 19, 2023
The inclusion of odd lot information in the Securities Information Processor (SIP) is a commendable effort by the Commission to enhance the transparency of the stock markets, and empower individual investors to make more informed investment decisions, particularly with respect to the firms handling their orders. It is worth noting that two years ago, the majority of trades in the markets were odd lots, accounting for a significant 55% of all trades (source: https://bettermarkets.org/newsroom/key-highlights-dennis-kellehers-testimony-march-17-house-financial-services-gamestop-hearing/). This proportion is likely even higher for certain tickers. It is puzzling why the bids and offers of so many orders are kept invisible. Removing odd lot information from this rule would significantly undermine my confidence in the U.S. markets, which is already shaken. It is essential to maintain a high degree of transparency in the stock markets, and the inclusion of odd lot information in the SIP is a critical step towards achieving this goal. The proposed tick size regime has the support of this author, who also advocates for a clear and unambiguous structure that doesn't rely on vague language. While some funds and firms may request more flexible language such as "reasonable liquidity at the NBBO", such phrasing only serves to complicate enforcement efforts and potentially waste taxpayer dollars on legal battles. To ensure efficient and effective regulation, it is crucial that the tick size rule structure and accompanying language are unambiguous and free of loose terminology. Therefore, it is strongly advised that any rules put forth be written with clarity and precision, without relying on subjective or interpretive language.