Mar. 31, 2023
Dear Sir/Madam, I am writing in regards to File No. S7-32-22; Release No. 34-96496· Regulation Best Execution. I strongly believe that the proposed changes to ATS rules promote better alignment with regulatory frameworks for exchanges and would be beneficial for individual household investors. However, I would like to stress the need for the SEC to 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. This would help to protect individual investors from abusive practices in the ATS market. To achieve this, 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. I also suggest that ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. Furthermore, providing 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, would improve the SEC's ability to oversee ATS and ensure compliance with regulatory requirements. In addition, I urge the SEC to consider implementing a variable minimum pricing increment model for both quoting and trading of NMS stocks. This would further promote fair and transparent pricing across trading venues, ultimately benefiting investors. Moreover, I support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. It is essential to create a competitive market structure that benefits investors and encourages transparency. Lastly, I recommend 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 PFOF, so a cap should be implemented. The 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. Thank you for considering my comments. Sincerely, Christopher Sheehan Household Investor