Dec. 29, 2022
December 29, 2022 While its infuriating to think the SEC has never had a rule that directed Brokers to provide best execution for their customers, I applaud you for finally trying to establish this. I see Rules 1100-1102 (S7-32-22) Regulation Best Execution as being better than nothing but falling far short of what should be done to protect investors. Instead, you should be banning PFOF which encourages Brokers to route orders in a way that creates profit for all involved EXCEPT the person who is putting in the money. In fact, it costs Retail Investors collectively BILLIONS every year. You should also make it standard operating procedure ALL transactions go through Lit Exchanges unless otherwise specified by the customer. As a Retail Investor, I feel like you are still bowing to the pressures of Wall Street and instead should be making and enforcing laws that protect consumers to fulfill your Mission Statement: The mission of the SEC is to protect investors maintain fair, orderly, and efficient markets and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public's trust. Right now, retail investors need to be educated how to make sure their buy/sells don't go through Dark Pools. I think it should be standard operating procedure that ALL transactions go through Lit Exchanges UNLESS the client/investor requests something different. All software should be required by the SEC to default to Lit Exchanges. You can teach people how to change that if they prefer to go through Dark Pools. Or, better yet, ban Dark Pools. Institutions can buy/sell off in small batches so companies and investors aren't hurt by temporary inflated/deflated prices. Dark Pools have been abused beyond their original purpose, and there is hard evidence their owners cant be trusted to manage them as they were originally designed. We know you have acknowledged this, but it's not being addressed to correct this atrocity. THERES NO WAY TO ESTABLISH FAIR MARKET VALUE WHEN 90% OF THE DATA IS HIDDEN. How does this create trust in the market? How is this a fair market? This practice doesn't only affect Retail Investors, but it affects pension funds, companies and their employees, and all hard-working people in the world who are trying to better their families. I repeat my sentiment that these proposed rules are better than nothing, but they fall short to solve the real problems of Dark Pools and PFOF. I also feel like these rules have no bite. It is allowing more self-regulation and trust that the parties will comply. We all know how well that has worked over the decades. The evidence proves the parties are not properly reporting, they are finding ways to hide their real data, and the SEC admits it doesn't have the funds or the people to properly monitor and enforce reports and/or events. There is also evidence that when you do enforce, the fines are minimal, they often are not collected, and the fines don't even come close to the benefits the parties have gained by their failure to comply. These rules feel like more of the same for all the reasons stated above. They don't do enough to achieve the much-needed overhaul of Wall Street and help you achieve your Mission Statement of protecting Investors and creating trust in the market. If you have nothing else to offer us to better the ugly landscape of Wall Street greed, then I support these proposals. I do wish we were provided something stronger, better, and with more chance of changing our grotesque financial markets. I'm hopeful you will modify these rules to ban PFOF altogether as other countries have around the world. In addition, these new rules should force all software to default to Lit Exchanges with any changes to be granted in writing by the Investor. I would also consider banning Dark Pools, but maybe this wouldn't be needed if you implemented the other two actions. I leave you with one last comment/fact: GREED HAS NO CEILING.