Mar. 12, 2023
As a household investor with a desire to see a more fair, free, credible, and transparent market. I fully support this rule proposal.
The rules the SEC passes are only as good as the enforcement behind those rules, I want to see higher fines to act as a significant deterrent, as well as broker-dealers habitually breaking rules to lose their licenses because some broker-dealers treat regulatory fines as a "cost of business" - a cost that is often significantly outweighed by the ill-gotten gains.
The current rule forces dark pools (Alternative Trading Systems) to provide quotes and trades to consolidated market data IF they wish to act as an auction. I fully support and encourage this rule change to bring more transparency to these dark markets. The investing public has a right to have easy access to what is happening within the markets.
In a market, competition is excellent. ***15 U.S.C. 78k-1 ("section 11A") states: "It is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure... fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets."
Monopolies are not beneficial to a market, and especially not beneficial to household investors. It should be noted that 90% of marketable orders of retail in NMS stocks go to a small group of 6 off-exchange dealers and 66% of those go to just two firms. These numbers will be even higher for specific stocks.
I dislike middlemen that exist solely to cut a transaction that would otherwise occur. I would much rather that money go to pension funds and not Wall St. billionaires.
Recent research by Hittal Mittesh suggests that on top of the Commission's estimate that the auctions would save individuals and institutions billions of dollars taken by wholesalers, it would also save institutions over 1.5 billion each year. Wholesalers are taking from citizens AND people's pensions - It needs to stop. Source
I also want to voice my concern about this rule allowing the orders to go to a wholesaler FIRST and then to a fair auction. This will give the wholesalers a massive information advantage and it should be removed. Brokers should route to a fair auction first and then IF AND ONLY IF there is no one to take the order, it should be routed to a wholesaler.