Mar. 19, 2023
As a concerned investor, I strongly support the SEC's proposed rule to reduce conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers. I believe that investors should have access to the best priced quotations available in the National Market System (NMS), and increasing transparency would be an important step towards achieving this goal. I welcome the proposed changes to ATS rules that promote better alignment with regulatory frameworks for exchanges, as I believe that this would be beneficial for individual household investors. However, I also believe that ATS should submit detailed disclosures about their operations, including how they manage conflicts of interest, how they operate their order routing practices, and how they handle customer orders. This would make it easier for investors to understand how ATS operate and how their orders are executed. Furthermore, I believe that ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. This would help to protect individual investors from abusive practices in the ATS market. ATS should also provide detailed information about the operation of their systems to the SEC, including data on the execution of orders, order routing practices, and information about the use of dark pools. This would improve the SEC's ability to oversee ATS and ensure compliance with regulatory requirements. In addition, I support the implementation of a variable minimum pricing increment model for both quoting and trading of NMS stocks, which would promote fair and transparent pricing across trading venues, ultimately benefiting investors. I believe that competition in the marketplace is necessary to regulate markets better and barriers to competition, such as the conflicted nature of payment for order flow (PFOF), should be removed. Sending orders to a wholesaler for internalization should not be the only option available to investors. Brokers may charge high commissions or fees in lieu of PFOF, so a cap should be implemented. I believe that the proposed rule changes would result in estimated savings for retail investors ranging from $1.12 billion to $2.35 billion, primarily through increased competition to supply liquidity to marketable orders. This is a significant amount, and I strongly support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. In conclusion, I urge the SEC to prioritize creating a competitive market structure that benefits investors and encourages transparency. Investors deserve to have access to the best priced quotations available in the NMS, and I believe that the proposed rule changes would be an important step towards achieving this goal. - Leonard Ford