Mar. 31, 2023
Dear SEC, I am writing to express my support for the proposed changes to Alternative Trading Systems (ATS) rules and to recommend additional measures to promote greater transparency and fairness in the securities markets. I believe that the SEC should reduce conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers, ensuring that investors have access to the best priced quotations available in the NMS. This can be achieved by requiring ATS to 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. Such disclosures would make it easier for investors to understand how ATS operate and how their orders are executed. Additionally, 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. I believe that 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. ATS should also 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. Furthermore, I support the proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, which would further promote fair pricing across trading venues, ultimately benefiting investors. 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. ATS should not be the only option available to investors, and brokers may charge high commissions or fees in lieu of PFOF, so a cap should be implemented. It is estimated that such a cap could save retail investors from $1.12 billion to $2.35 billion, primarily through increased competition to supply liquidity to marketable orders. Finally, I urge the SEC to prioritize creating a competitive market structure that benefits investors and encourages transparency. Household investors support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Thank you for your attention to these important matters. Sincerely, T.V. Steinburg