Apr. 01, 2023
To Whom It May Concern, I have the privilege of understanding the complex system of financial markets in America due to my time spent working at a top firm on Wall Street. Most retail investors do not have this level of understanding and need protection from predatory brokers and funds. Best execution is important in trade execution for individual investors who may not understand the complexities involved in choosing how to execute a trade. Provide clear guidance on how to read and interpret the data in Regulation NMS Rule 605 reports, especially for retail investors who may not have a deep understanding of the markets. Brokers owe their customers a duty of Best Execution derived from common law agency principles and fiduciary obligations, but it needs to become a rule that the SEC can enforce. Without the best execution rule, customers may not be aware of revenue arrangements between brokers and subpar trading firms or that they may be paying higher transaction prices. Different trading venues may offer different prices, slower execution can lead to missed opportunities. Information leaks can inhibit a successful transaction, and less reliable settlement processes can delay receipt of proceeds. In December 2020, Robinhood was charged by the SEC with failure to satisfy its best execution obligation, resulting in an aggregate loss of $34.1 million for its customers. Robinhood made misleading statements and did not disclose payments received for routing trades to specific firms. This is no acceptable and this rule is the first step in preventing abuse. Citadel paid the SEC $22.6 million in 2017 to settle best execution charges for executing customer trades at less favourable pricing when a better price was available. Change needs to happen and this is a great first step. Regards, Luke Petersen