Mar. 31, 2023
Dear SEC, I am writing to express my strong support for the SEC's proposed changes to ATS rules, which would promote better alignment with regulatory frameworks for exchanges and benefit individual household investors. However, I believe that more needs to be done to reduce conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers, and to ensure fair and transparent pricing across trading venues. To achieve these goals, I recommend that ATS submit detailed disclosures about their operations, establish and enforce written policies and procedures to prevent fraudulent and manipulative practices, and provide detailed information about the operation of their systems to the SEC. This would improve the SEC's ability to oversee ATS and ensure compliance with regulatory requirements, while making it easier for investors to understand how ATS operate and how their orders are executed. I also strongly recommend that ATS implement a variable minimum pricing increment model for both quoting and trading of NMS stocks, which would promote fair and transparent pricing across trading venues, ultimately benefiting investors. It is essential for ensuring a level playing field for all investors. Additionally, I urge the SEC to cap fees charged by brokers and wholesalers for PFOF and to promote competition in the marketplace. Sending orders to a wholesaler for internalisation should not be the only option available to investors. By removing barriers to competition, such as the conflicted nature of PFOF, estimated savings for retail investors could range from $1.12 billion to $2.35 billion, primarily through increased competition to supply liquidity to marketable orders. Household investors support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Therefore, I recommend that ATS operate in a manner that is consistent with the broader regulatory structure of the securities markets, and provide investors with access to the best priced quotations available in the NMS. In conclusion, I urge the SEC to prioritize creating a competitive market structure that benefits investors and encourages transparency. By reducing conflicts of interest and promoting fair and transparent pricing, the SEC can help to build public confidence and trust in the market, particularly in light of recent events that have highlighted the need for greater transparency and fairness. Thank you for your consideration. Sincerely, A Concerned Investor