Mar. 31, 2023
I am writing to emphasize the importance of reducing conflicts of interest in our financial markets by increasing transparency in the routing of orders by brokers and wholesalers. As a concerned investor, I believe that investors should have access to the best priced quotations available in the National Market System (NMS). The proposed changes to Alternative Trading Systems (ATS) rules, aiming for better alignment with regulatory frameworks for exchanges, would be highly beneficial for individual household investors. To improve transparency and protect investors, I propose the following measures: ATS should submit detailed disclosures about their operations, including their management of conflicts of interest, order routing practices, and handling of customer orders. This would enable investors to better 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, protecting individual investors from abusive practices in the ATS market. ATS should provide comprehensive information about the operation of their systems to the SEC, including data on order execution, order routing practices, and dark pool usage. This would enhance the SEC's oversight of ATS and ensure compliance with regulatory requirements. ATS should operate consistently with the broader regulatory structure of the securities markets, promoting fair and transparent trading practices that benefit individual investors. ATS should implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, promoting fair and transparent pricing across trading venues and ultimately benefiting investors. I would also like to express my support for the proposal to implement a variable minimum pricing increment model for both quoting and trading of National Market System (NMS) stocks. This change is essential in promoting fair pricing across trading venues, creating a level playing field for all investors, and enhancing the overall integrity of American markets. Household investors like myself firmly support initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of our financial markets. We believe that sending orders to a wholesaler for internalization should not be the only option available to investors. It is crucial to recognize that brokers may charge high commissions or fees in lieu of Payment for Order Flow (PFOF), and therefore, a cap should be implemented to protect investors. Retail investors could save an estimated $1.12 billion to $2.35 billion primarily through increased competition to supply liquidity to marketable orders. Competition in the marketplace is vital for better market regulation, and barriers to competition, such as the conflicted nature of PFOF, should be removed. The SEC must prioritize creating a competitive market structure that benefits investors and encourages transparency. In conclusion, I urge the SEC to adopt the variable minimum pricing increment model for NMS stocks and take the necessary steps to promote fair competition, increase transparency, and protect investors. By doing so, you will ensure a more robust and secure financial market for all participants.