Mar. 31, 2023
To whom it may concern, I am writing to provide my comments on File No. S7-32-22 and Release No. 34-96496 regarding the Regulation Best Execution. As an investor, I strongly believe that the SEC should focus on reducing conflicts of interest and increasing transparency in the routing of orders by brokers and wholesalers. The proposed changes to ATS rules to promote better alignment with regulatory frameworks for exchanges would be beneficial for individual household investors. I also suggest that 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. Additionally, I recommend that ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices, 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. Moreover, 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 suggest that ATS should 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. Furthermore, 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. I believe that 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. Lastly, I strongly recommend that the SEC prioritize creating a competitive market structure that benefits investors and encourages transparency. The SEC must focus on reducing conflicts of interest and increasing transparency in the routing of orders by brokers and wholesalers to achieve this. Thank you for your consideration. Sincerely, Zach Woodward, a concerned investor