Mar. 31, 2023
To Whom it May Concern, Thank you for your time in reading and considering this letter- I am a household investor and small business owner. I believe that in order to build on the hard work I’ve invested in my business and my community - to have something to pass down to my children - and to invest in my own security for the future, that the financial markets must work fairly and in a way that ensures equal access and opportunities for all market participants. It has become clear through my observations of the markets over the past years that there are numerous ways in which large financial interests have continually gained numerous advantages, engineered or accessed legal loopholes, and created systems that inherently disadvantage household investors: the very people who makeup the moral and market fabric of our society are being exposed to a system that inherently works to extract the hard earned wealth that every day people are investing their lives into earning. It is with this thought in mind that I want to speak today in regards to best execution and the proposals regarding its alteration. I believe that SEC should work towards reducing any opportunity for conflict of interest to exist in the financial markets and specifically by enhancing transparency of order routing by wholesalers and brokers - while allowing investors to have access to best pricing through NMS. The rule changes proposed to the Alternative Trading System (usually internalized platforms for matching buyers and sellers) are beneficial for household investors and markets in general, and tighten alignment with regulatory frameworks. Any ATS should have to submit detailed disclosures regarding their policies for order routing, with specific attention paid to customer order handling, and a comprehensive conflict of interest mitigation plan. It should be very clear to any investor who may even be tangentially affected by an ATS to understand how these exposure could practically interact with the markets in general and their position specifically. These policies should be intentionally created, put into a format that is easily disseminated and required to be displayed or communicated and should be directed specifically towards the preventing of fraudulent practices but also manipulation of any kind. This would serve to help insulate investors from many commonly found abuses being practiced daily in the ATS markets. Additionally, an ATS should have to provide detailed and audited information to the regulatory bodies that pertains to order execution, routing, dark pools usage, and any other pertinent metrics. This would greatly serve the SEC by increasing their ability to oversee an ATS and maintain compliance with all regulations. Any trading platform must operate in a manner that is consistent with the regulatory landscape of financial markets and ATS’ are not an exception. In fact they likely deserve extra scrutiny as they are inherently closed/opaque platforms. This clearly would well serve regulatory bodies and investors at large. All ATS should be required to adhere to a variable minimum pricing increment model in trades and quotes of NMS stocks- this enhances clear fair pricing across multiple trading platforms - benefiting all investors. I support and hear broad community support any proposals or initiatives targeting the elimination or prevention of fraudulent practices that weaken the financial markets of fellow Americans and the perceptions of our markets as being fair, trustworthy and effective for everyone. Investors’ orders should have access to many trading venues not just wholesalers. And those wholesalers or brokers should have fees capped to avoid even the possibility of exploitative practices. It is believed that household investors could likely see savings of between 1 and 2 billion dollars should these rule proposals be adopted through the increased competition and enhancement to transparency. And increasing competition should be a primary goal for market participants, regulators, and backstopping institutions as it breeds more market efficient and functionality for all. Any proposal or practice that ATS 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. We believe that payment of order flow, the lack of order flow transparency, the lack of clarity as to how execution is happening in ATS in general and related factors mentioned here are all highly detrimental to the efficiency of our markets and should be eliminated. I believe this rule is a solid step towards better markets for everyone. Thank you- Alex Fleming