Mar. 19, 2023
Dear Sir/Madam, I am writing in regards to File No. S7-32-22; Release No. 34-96496, concerning Regulation Best Execution. As a concerned investor, I strongly believe that transparency in the routing of orders is crucial to reducing conflicts of interest and ensuring that investors have access to the best priced quotations available in the National Market System (NMS). I support the proposed changes to ATS rules that promote better alignment with regulatory frameworks for exchanges. This would be beneficial for individual household investors, who require a level playing field in order to make informed decisions regarding their investments. I recommend that ATS 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. It is also important that ATS 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. I suggest that ATS 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. ATS should operate in a manner that is consistent with the broader regulatory structure of the securities markets, which would benefit individual investors by promoting fair and transparent trading practices. Additionally, ATS should implement a variable minimum pricing increment model for both quoting and trading of NMS stocks which would further promote fair and transparent pricing across trading venues, ultimately benefiting investors. Household investors support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. It is also important that sending orders to a wholesaler for internalisation should not be the only option available to investors. Finally, I recommend that the SEC should implement a cap on the fees that brokers may charge in lieu of payment for order flow (PFOF). Estimated savings for retail investors range from $1.12 billion to $2.35 billion, primarily through increased competition to supply liquidity to marketable orders. Competition in the marketplace is necessary to regulate markets better, and barriers to competition, such as the conflicted nature of PFOF, should be removed. The SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. Thank you for your attention to this matter. Sincerely, Wessel Jaegers