Subject: RE: File No. S7-30-22; Release No. 34-96494; Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders
From: Spencer Neukam
Affiliation:

Mar. 26, 2023

  




Hi, 


I am a concerned investor and would like to provide my comments on S7-20-22; Release No. 34-36494, aka The Tick Size Rule. 


I fully support this rule. 



Here are my primary comments. 



I strongly support the Commission's proposed tick size regime, and recommend clear and unambiguous language in the rule structure to avoid any confusion or litigation. Instead of allowing rebates and other inducements in the marketplace, establish a zero or very low fee structure to eliminate the potential for trading for the sake of volume.
I would like to see a minimum variable pricing increment model implemented that applies to both quoting and trading of NMS stocks to promote fair and transparent pricing across trading venues.

While reducing the access fee caps is a step in the right direction, completely eliminating exchange rebates would further enhance transparency and fairness in the market.


I recommend accelerating the implementation of the revised round lot definition and odd lot dissemination on the SIP to enhance reporting efficiency and reduce delays.



I want to stress the importance of taking these steps to regain public confidence and trust in the market, particularly in light of recent events like the GameStop controversy. 


I would also like to stress that enforcement matters. I would like to see higher fines, bigger penalties, and in many cases, actual consequences where there may have been none. 


Additional comments 


I support the additional 0.64 cents per share to avoid being routed through a wholesaler that has been charged over 70 times by the United States Government. Source: firm_116797.pdf (finra.org). The price improvement provided by these wholesalers is minimal and not worth the damage they bring to the market. I, and many other investors, will gladly pay commission to avoid being routed through a wholesaler, especially one with a long record of flouting the law like Citadel Securities. I fully support the harmonization of tick sizes across all exchanges. No exceptions, no "reasonable" vague language. Clear rules, clear language. 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. 
The definition of tick-constrained should apply to as much of the market as possible. This rule will be watered down if the definition is too narrow. The important thing is that everyone trades and provides quotes according to the same rules. 
I very much dislike the presence of rebates and other inducements in the marketplace - they are simply payment for order flow by another name. I prefer the fees were reduced to zero, but .001 will do. No higher.

I support the inclusion of odd-lot information in the SIP. Odd lots are a majority of trades and should have a greater impact on price. Make it clear you want odd lots to impact the NBBO and have a concrete effect on both price and broker's duty of best execution.


I hope these comments can be considered. Retail (household) investors in the U.S. want to have increasing confidence in our equity markets. I believe this rule is a step in the right direction, and I believe there need to be additions and adjustments to the existing proposal, as commented above.







Sincerely, 
Spencer Neukam