Mar. 31, 2023
Dear SEC Commissioners, I am writing to express my concerns about the current state of the American financial markets. As a household investor, I believe that fair competition is essential, and I am deeply concerned about the monopolistic behavior of middlemen and the lack of transparency in dark markets. I believe that by removing profiteering middlemen from the market and bringing more transparency to dark markets, will help improve prices for both individuals and institutions. Additionally, I support the new rule that states that Citadel cannot be the first to receive orders; instead, orders must go to a public auction where everyone, including pension funds, has an equal opportunity to fill the order. I also believe that Payment for Order Flow (PFOF) has been effectively banned in the UK due to conflict-of-interest concerns – and this should be the case in US markets too. Brokers who do not accept any kind of PFOF route orders differently and consequently see superior execution quality. Furthermore, a recent study found that Robinhood does not provide statistically significant price improvement relative to exchanges, despite PFOF being responsible for around 70% of its revenue. Retail investors not dealing with PFOF get a better price than those dealing with it, violating FINRA's Best Execution guidance. I believe that FINRA should evaluate the impact of not charging commissions on member firms' order-routing practices and decisions, and the findings should be made public. I am also concerned about the influence of wholesalers on other market participants and the conflicts of interest that may infect the ability of some participants to review the rules objectively. Wholesalers are taking billions from individuals and institutions and calling it "superior performance" while lying about the quality of their services to maintain their profits. I believe that the SEC should investigate conflicts of interest among market participants to ensure that participants can objectively review the rules. In my opinion, enforcement of SEC rules needs to be improved with higher fines to serve as a significant deterrent for breaking the law OR Some broker-dealers should lose their licenses instead of receiving fines that effectively amount to nothing. The state of American markets is anti-competitive, and fair competition is essential. The Commission needs to ensure fair competition, especially within the off-exchange systems that currently dominate. I urge the SEC to address the unfair information advantage of wholesalers by having brokers first route to the auction and specify where the order should go if the auction is unsuccessful. The proposed rule to bring more transparency to dark markets should be implemented as soon as possible. The Commission should ensure fair competition by reducing monopolistic behavior and removing profiteering middlemen from the market. It was once said that “internalization is one of the greatest threats to price discovery in the financial markets” – Kenneth Griffin, President and Chief Executive Officer, Citadel Thank you for your attention to this important matter. Sincerely, A household investor