Apr. 01, 2023
I am writing to express my support for File No. S7-32-22; Release No. 34-96496; Regulation Best Execution. I strongly believe that reducing conflicts of interest and increasing transparency in the routing of orders by brokers and wholesalers is essential to protect individual investors and promote fair and transparent trading practices in the securities markets. The proposed changes to Alternative Trading Systems (ATS) rules would promote better alignment with regulatory frameworks for exchanges, which would be beneficial for individual household investors. 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. Moreover, ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. This would help to protect individual investors from abusive practices in the ATS market. Additionally, 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. Furthermore, implementing a variable minimum pricing increment model for both quoting and trading of NMS stocks 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. I strongly believe that competition in the marketplace is necessary to regulate markets better and barriers to competition, such as the conflicted nature of Payment for Order Flow (PFOF), should be removed. Sending orders to a wholesaler for internalization should not be the only option available to investors. Moreover, brokers may charge high commissions or fees in lieu of PFOF, so a cap should be implemented. Household investors support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. 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. Finally, the SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. A competitive market structure is essential to protecting investors and ensuring a level playing field for all market participants. Thank you for considering my views on this important matter.