Mar. 19, 2023
Hello, I support the order competition rule File S7-31-22. The individual investor should have access to the best prices available in the market, not to be determined by a very limited pool of wholesalers/dealers or any other Market entity, but through fair competition in the whole marketplace. At first glance, no commission trades seemed to be a good deal as a household investor with a finite budget. But the underlying mechanics of that system don’t work in favor of retail investors. The old adage nothing in life is free, certainly applies. Using PFOF and high frequency trading tactics, wholesalers like Citadel and Virtu and the brokers they work with have created a profitable pipeline funneling the majority of orders internally, scalping fractions of profit from the difference of the best price and a “competitive” price by eliminating the opportunity for the rest of the market to participate in the order auction. This rule is an important step forward in creating a fair market and an important rule in keeping with the objectives of the SEC per Title 15 U.S.C 78k-1 of the US legal code, assuring an opportunity… for investors’ orders to be executed without the participation of a dealer. I have a few concerns regarding this rule. First, this rule or adjacent ones should limit the commission fees so that brokers don’t try to replace the PFOF profits at the cost of retail and household investors as myself. Secondly, I hope that there are substantial consequences if infractions occur to this rule. The penalty of a violation should not be considered a cost of doing business but something that keeps entities from pushing the limits of the rule or downright breaking it altogether. Thanks for the time and your efforts on this topic.