Mar. 31, 2023
Dear Commissioners and Staff of the Securities and Exchange Commission, I am writing to express my strong support for the Commission's proposed tick size regime and other related market structure improvements. As an investor in the US stock market, I believe that these changes will promote fairness, transparency, and trust in the market. Here are my thoughts on various aspects related to the subject: Clear rule language: I recommend that the rule structure should have clear and unambiguous language to avoid confusion and potential litigation. Eliminating rebates: Instead of allowing rebates and other inducements, establish a zero or very low fee structure to prevent trading purely for volume. Variable minimum pricing increment: Implement a model that applies to both quoting and trading of NMS stocks, promoting fair and transparent pricing across venues. Removing exchange rebates: While reducing access fee caps is a positive step, completely eliminating exchange rebates would further enhance transparency and fairness in the market. Revised round lot definition: I recommend accelerating the implementation of the revised round lot definition and odd lot dissemination on the SIP to improve reporting efficiency and reduce delays. Public confidence: Emphasize the importance of these steps in regaining public trust in the market, especially in light of recent events like the GameStop controversy. Enforcement: I strongly support higher fines, bigger penalties, and actual consequences for market participants who break the rules. Avoid wholesaler routing: Investors should be willing to pay an additional 0.64 cents per share to avoid routing through a wholesaler with a history of regulatory charges. The price improvement provided by such wholesalers is minimal and not worth the damage they bring to the market. Commission preference: 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. Harmonization of tick sizes: I fully support the harmonization of tick sizes across all exchanges with clear rules and language. No exceptions should be allowed, as it can lead to monopolistic control and counteract the positive benefits of competition. Tick-constrained definition: The definition of tick-constrained should apply to as much of the market as possible. The rule would be weakened if the definition is too narrow. All participants should trade and provide quotes according to the same rules. Rebates and inducements: I strongly oppose the presence of rebates and other inducements in the marketplace, as they are merely payment for order flow by another name. I prefer fees to be reduced to zero, but 0.001 is acceptable. No higher. Odd-lot information in SIP: I support the inclusion of odd-lot information in the SIP. Odd lots, as a majority of trades, should have a greater impact on price. I advocate for odd lots to influence the NBBO and affect both price and brokers' duty of best execution. In conclusion, I strongly believe that the implementation of these proposed changes will lead to a fairer and more transparent market, ultimately benefiting all investors Sincerely, Matthew Molnar