Mar. 31, 2023
Dear Ms. Countryman, The proposed rule to increase transparency and competition in the market for NMS stocks is an important step in the right direction towards a more fair market. The rules support for public auctions that give all participants an equal opportunity to fill orders, rather than just giving the first right to Citadel, is especially commendable. Payment for Order Flow (PFOF) has long been a controversial issue, and the proposed ban of PFOF is a necessary measure to address conflict of interest concerns. In fact, PFOF is already banned in the UK for this exact reason and I truly believe America should follow suit. The studies finding that Robinhood does not provide statistically significant price improvement despite PFOF being responsible for ~70% of its revenue is alarming, and further reinforces the call to ban this practice. The proposed rules focus on ensuring that broker routing decisions are motivated by competition is a welcome move. Brokers who do not accept any kind of PFOF should not be at a disadvantage, and should be able to route orders differently and see superior execution quality. The need to evaluate the impact of not charging commissions on member firms’ order routing practices and decisions is an important consideration, and the findings of this evaluation should be public. The proposal to bring more transparency to dark markets by requiring dark pools to provide quotes and trades to consolidated market data is also a much-needed measure. Whole salers exercise extreme influence on other market participants, and the conflicts of interest that arise from their profiteering need to be addressed. Removing middlemen from the market will improve prices for both individuals and institutions, and save billions of dollars taken from wholesalers. Overall, the proposed rule is a positive step towards ensuring fair competition and transparency in the market for NMS stocks. The SEC should absolutely investigate clear conflicts of interest among market participants to ensure that the rules are objectively reviewed, and enforcement of SEC rules needs to be improved with higher fines to serve as significant deterrent for breaking the law. The commission should also consider rebooking licenses of broker-dealer who repeatedly break the roles, rather than a fine - which, relatively speaking, is just their cost of doing business. Thank you for taking the time to read my comment. With respect, Corbin Schmucker, retail investor