Mar. 31, 2023
Increasing transparency in the routing of orders by brokers and wholesalers and providing investors with access to the best-priced quotations available in the National Market System (NMS) would be beneficial for individual household investors. This would enable investors to better understand how ATS operate and how their orders are executed, and would help protect them from abusive practices in the ATS market. The implementation of a variable minimum pricing increment model for both quoting and trading of NMS stocks would promote fair pricing across trading venues, ensuring a level playing field for all investors. This would increase competition in the marketplace, which is necessary for regulating markets and promoting transparency. Limiting the ability of brokers to send orders to wholesalers for internalisation and capping high commissions or fees in lieu of payment for order flow (PFOF) would also benefit investors. Estimated savings for retail investors from increased competition to supply liquidity to marketable orders range from $1.12 billion to $2.35 billion. Overall, prioritising the creation of a competitive market structure that benefits investors and encourages transparency should be a priority for the SEC.