Mar. 31, 2023
Vanessa A. Countryman Secretary U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 205499–1090 rule- RE: File No. S7-30-22; Release No. 34-96494; Tick Sizes, Access Fees, and Transparency of Better Priced Orders Dear Ms Countryman, I will start this comment as I have for the other rules currently proposed... I have always been skeptical that the SEC was upholding their stated mandate to protect investors. Rules and laws are only as good as the enforcement that backs them, and it seems that paltry fines are just a cost of doing business for those abusing our markets. But I have been pleasantly surprised by the recent proposed rules and, should these rules be implemented AND enforced, we will be making progress towards a more fair, orderly, and efficient market. The proposed "tick size" rule (File No. S7-30-22; Release No. 34-96494) is a necessary step to level the playing field and support the SEC mandate to "assure fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets". I was very surprised to learn that not all exchanges are treated equally when it comes to tick size, as this is clearly counter to the SEC mandate. If some exchanges are not constrained by the same minimum pricing increments as others they clearly have an advantage which allows them to build monopolies in certain parts of the market. All exchanges should be quoting and trading in the same increments and this should apply to as much of the market as possible. This rule also reduces access fee caps which is a start, but completely removing exchange rebates would be far more beneficial to the market. Rebates and other incentives seem no different than "payment for order flow" which is a clear conflict of interest for brokers. As a household investor I would gladly pay a reasonable commission to keep our markets fair and ensure real price discovery. As for odd-lots, these now represent a majority of trades in the market and certainly almost all household investors so it is vital that this information impacts the price of a stock. These trades should absolutely be included in the calculation of the NBBO so I trust you will find a way to fairly and proportionately include this data. The language of this rule (including the specifics of the tick size structure) needs to be absolutely clear so enforcement is straightforward. Those who have already built unfair monopolies will not hesitate to waste time and taxpayer money on litigation fighting these rules, so it is imperative that there is no room for fuzzy interpretation. I look forward to seeing this rule implemented as soon as possible. While some of the bad actors in our market are urging the SEC to hesitate because of "unintended consequences", I would say the consequences of not taking decisive and prompt action will be a further erosion of trust in our market. Not just among the voting public in the US but also our market participants around the world. Thank you for your efforts to protect our market and household investors like myself. Sincerely, Lindsey Marshall