Mar. 31, 2023
Dear SEC, To reduce conflicts of interest, the SEC should increase transparency in order routing by brokers and wholesalers, allowing investors to access the best available prices in the National Market System (NMS). Proposed changes to Alternative Trading Systems (ATS) rules would align them better with regulatory frameworks for exchanges, which would benefit individual household investors. ATS platforms should submit detailed disclosures about their operations, including how they manage conflicts of interest, route orders, and handle customer orders. This would help investors understand how ATS operate and execute their orders. ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices, protecting individual investors from abusive practices in the ATS market. ATS should provide detailed information about their systems to the SEC, including execution data, order routing practices, and information about dark pools. This would improve the SEC's ability to oversee ATS and ensure compliance with regulations. ATS should operate consistently with the broader regulatory structure of securities markets, promoting fair and transparent trading practices that benefit individual investors. Implementing a variable minimum pricing increment model for NMS stocks would promote fair pricing across trading venues, leveling the playing field for all investors. Household investors support initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Investors should have options beyond sending orders to a wholesaler for internalization, and brokers should be subject to a cap on high commissions or fees charged in lieu of payment for order flow (PFOF). Increased competition to supply liquidity to marketable orders could result in estimated savings of $1.12 billion to $2.35 billion for retail investors. The SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency by removing barriers to competition, such as the conflicted nature of PFOF. - a concerned investor