Mar. 24, 2023
To whom it may concern, I am writing to share my thoughts on some important issues related to the securities market, specifically in relation to Alternative Trading Systems (ATS) and the role of the Securities and Exchange Commission (SEC) in regulating them. Firstly, I believe that the SEC should take steps to reduce conflicts of interest by promoting greater transparency in the routing of orders by brokers and wholesalers. It is essential that investors have access to the best priced quotations available in the National Market System (NMS) to ensure fair and transparent trading practices. I am also in support of the proposed changes to ATS rules, which would promote better alignment with regulatory frameworks for exchanges. These changes would be particularly beneficial for individual household investors, who need to be protected from abusive practices in the ATS market. To achieve this, ATS should be required to submit detailed disclosures about their operations, including how they manage conflicts of interest, order routing practices, and customer order handling. This would make it easier for investors to understand how ATS operate and how their orders are executed. Additionally, ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. I strongly believe that ATS should 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. Furthermore, it is crucial that ATS operate in a manner that is consistent with the broader regulatory structure of the securities markets. This would benefit individual investors by promoting fair and transparent trading practices. To further promote fair and transparent pricing across trading venues, I suggest that ATS implement a variable minimum pricing increment model for both quoting and trading of NMS stocks. This would ensure a level playing field for all 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 essential that sending orders to a wholesaler for internalisation should not be the only option available to investors. Brokers may charge high commissions or fees in lieu of Payment for Order Flow (PFOF), so a cap should be implemented. Thank you for taking the time to read my letter. I hope that my suggestions will be considered and that they will help to promote fair and transparent trading practices in the securities market. Sincerely, Chris Morrow