Mar. 31, 2023
Dear Sir/Madam, I am writing to express my strong support for the Securities and Exchange Commission's proposed rule on Prohibition on Payment for Order Flow (File No. S7-32-22) and to recommend additional measures that could further enhance transparency, fairness, and efficiency in the market. Firstly, I strongly believe that 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 National Market System. The proposed changes to Alternative Trading Systems (ATS) rules promote better alignment with regulatory frameworks for exchanges, which would be beneficial for individual household investors. To ensure greater transparency, 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. Furthermore, ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices, which would help to protect individual investors from abusive practices in the ATS market. ATS should also 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. Additionally, 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. I support the proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, which would promote fair pricing across trading venues, benefiting all investors. This model would also further promote fair and transparent pricing across trading venues, ultimately benefiting investors. Furthermore, 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 internalization 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. 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. In conclusion, the SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. The proposed rule on Prohibition on Payment for Order Flow is a step in the right direction, and I urge the SEC to implement additional measures to enhance transparency, fairness, and efficiency in the market. Thank you for your consideration. Sincerely, Jason Karkiewicz Jason Karkiewicz KOTE INSTRUMENT SERVICE Radio Channel - CGL p 574.654.1258 Jason.Karkiewicz@ClevelandCliffs.com CLEVELAND-CLIFFS INC. Tek and Kote 30755 Edison Road, New Carlisle, IN 46552-9695 p 574.654.1000 clevelandcliffs.com ______________________________________________________________________________________________________ This electronic message and any attachments included with this message are for the exclusive use of the individual or entity to which it is intended to be addressed. This message may contain information that is privileged or confidential and thereby exempt and protected from unauthorized disclosure under applicable law. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, be aware that any disclosure, dissemination, distribution or copying of this communication, or the use of its contents, is not authorized and is strictly prohibited. If you have received this communication and are not the intended recipient, please notify the sender immediately and permanently delete the original message from your e-mail system. ______________________________________________________________________________________________________