Mar. 9, 2023
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Dear SEC, In response to the call for comments for reg No.S7-32-22 - please see the below response. I hope you consider these responses dutifully, and thank you for your time in reading them. I think any broker-dealers should lose their licenses instead of receiving fines after having breached regulations more than thrice. These fines that amount to nothing more than a cost of doing business - a cost that is often outweighed by the ill-gotten gains obtained through “honest mistakes”. There should be no voluntary payments and all breaches should be fully investigated and publicly reported. Every rule the SEC passes is only as good as the enforcement that backs it. If licences aren't revoked, I want to see higher fines that actually serve as a significant deterrent, for example 50% of the average annual GROSS earnings of the last 3 years. Regarding PFOF, I would gladly pay 12 cents more a share and commission to avoid being routed through a wholesaler, who skims and makes a profit off household investors and has also been charged over 70 times by the United States government[1], especially those with any record of flouting the SEC rules. I fully support the harmonization of tick sizes across all exchanges. I was shocked to learn that some exchanges get special treatment and are able to leverage that special treatment to build monopolies in some areas of the market. All exchanges should have to quote AND trade in the same increments. Some exchanges shouldn’t be granted an unfair advantage over others. It leads to monopolistic control of parts of the market that counteract and eventually kill the positive benefits of competition. The markets are supposed to be fair - so make them fair. If a company can work at several decimal places smaller than competition, they will ALWAYS be at an advantage buying and selling securities. I dislike the presence of rebates and other inducements in the marketplace - they are simply payment for order flow by another name. I would prefer you reduce access fees to zero; no "take". I support the tick size regime proposed by the Commission, and would also support any structure that is clear and does not rely on vague language. For example, some funds and firms might request language like "has a reasonable amount of liquidity at the NBBO", which translates to "I can ignore the rule if I feel my lawyers can help me get away with it". Loose language makes enforcement impossible, and wastes taxpayer dollars on needless litigation time. Clear language and a clear and unambiguous tick size rule structure are strongly preferred. Please do not include vague language in the application of your rules. Close these loopholes before they are opened. I support the inclusion of odd lot information in the SIP, and applaud the Commission's efforts to provide individual investors with more information with which to make better investing decisions - especially concerning which firms are allowed to handle our orders. Two years ago, the majority of trades in the markets were odd lots (55%)[2]. For certain tickers, this proportion is certainly much higher. Why are the bids and offers of so many orders kept invisible? If the Commission were to remove odd lot information from this rule, my faith in the U.S. markets would become even more damaged than it already is. I believe the exclusion of odd lots from the NBBO is a problem. Odd lots are now a majority of trades in the markets. Within some stocks, they are the vast majority. The exclusion of odd lots from the price of a stock amounts to the exclusion of most household investors - most of the voting public. Please look into a way to fairly and proportionately include odd lots in the calculation of the NBBO, rather than allowing broker-dealers to internalise these trades and weaponize this majority to their own ends, usually to the detriment to household investors. 1 - https://files.brokercheck.finra.org/firm/firm_116797.pdf 2 - https://bettermarkets.org/newsroom/key-highlights-dennis-kellehers-testimony-march-17-house-financial-services-gamestop-hearing/ Warm regards, Henry Wilford Ward