Mar. 31, 2023
Good evening, The proposed changes to SEC rules should promote transparency in the routing of orders by brokers and wholesalers, providing investors access to the best priced quotations available in the NMS. This would benefit individual household investors by promoting fair and transparent trading practices. Alternative Trading Systems (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. ATS should also establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. They 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. 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. They should implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, promoting fair pricing across trading venues. 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. 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. The SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. Overall, household investors support initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Thank you, Shaun