Mar. 25, 2023
Dear Sir or Madam, enclosed is my comment on the proposed rule. I very much hope that this will be implemented, as my confidence in the American market and any enforcement of any rules intended to protect retail investors has drastically decreased. My name is Andreas Scheffler. I am a German citizen and participate in the US securities markets as a household investor. I believe the current market structure enables abuse of loopholes for market makers and other high frequency trading firms. Namely companies like Citadel, and its affiliates leverage these exceptions or loopholes to gain a material financial competitive advantage to a degree which I feel, at minimum, is a conflict of interest, and realistically a form of market manipulation. Best execution requires a more true process of price discovery, where any price improvement is reflected in the value the household investor receives on their securities or equities transactions. I also agree with the following agreements or remarks I have sourced from the internet: Payment for Order Flow (PFOF) has been effectively banned in the UK due to conflict-of-interest concerns – and this should be the case in US markets too. Retail investors not dealing with PFOF get a better price than those dealing with it, violating FINRA's Best Execution guidance. The SEC should reduce conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers, with investors having access to the best priced quotations available in the NMS. The proposed changes to Alternative Trading Systems (ATS) rules promote better alignment with regulatory frameworks for exchanges would be beneficial for individual household investors. 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. 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 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. ATS 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. The proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks would promote fair pricing across trading venues, which is essential for ensuring 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. 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 PFOF, so a cap should be implemented. 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 prioritise creating a competitive market structure that benefits investors and encourages transparency. Please stop watching porn at the SEC and start enforcing rules!" Thank you Andreas Scheffler