Mar. 26, 2023
Vanessa Countryman, Secretary U.S. Securities and Exchange Commission 100 F Street, N.E, Washington, D.C. 20549 File No. S7-30-22; Release No. 34-96494; Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders Dear Ms. Countryman: I am writing to comment on the above proposed regulation, and to voice my support for it. It is heartening to see the SEC finally addressing some of the many issues impacting our markets and attempting to level the playing field. The proposed tick size regime, variable minimum pricing increment model, and revised round lot definition are important steps towards promoting fair and transparent pricing across trading venues. I strongly support the harmonization of tick sizes across all exchanges and the elimination of rebates and other inducements in the marketplace. It is imperative to establish a zero or very low fee structure to eliminate the potential for trading for the sake of volume. I also support the acceleration of the revised round lot definition and odd lot dissemination on the SIP to enhance reporting efficiency and reduce delays. But let's also be clear: Any more stringent regulation is meaningless if there is no enforcement. Every rule the SEC passes is only as good as the enforcement that backs it. I want to see higher fines that actually serve as a significant deterrent. Specifically, 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”. As enforcement matters, I strongly recommend higher fines, bigger penalties, and actual consequences for those who break the rules. I also believe the vast majority of investors would be willing to pay an additional cost per share to avoid being routed through a wholesaler with a history of breaking the law like Citadel Securities. The price improvement provided by these wholesalers is minimal and not worth the potential damage they bring to the market. I support the inclusion of odd-lot information in the SIP as odd lots represent a majority of trades and should have a greater impact on price. It is important that odd lots impact the NBBO and have a concrete effect on both price and broker's duty of best execution. I also suggest that the definition of tick-constrained should apply to as much of the market as possible to avoid any watering down of the rule. In conclusion, I believe that these proposed measures will help to regain public confidence and trust in the market, particularly in light of recent events like the GameStop controversy. It is also abundantly clear that bad actors are using the current system to their advantage, and to the detriment of retail investors, and this must stop. It is crucial to ensure that the markets are fair and transparent for all participants, and we strongly urge the SEC to implement these rules in a clear and unambiguous manner to avoid confusion or litigation. Thank you for your consideration of these comments.