Mar. 31, 2023
The SEC should reduce conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers, with investors having access to the best practiced quotations available in the NMS. The proposed changes to ATS rules promote better alignment with regulatory frameworks for exchanges would be beneficial for individual households investors. ATS (Alternative Trading Systems) 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. This would make it easier for investors to understand how ATS operates and how their orders are executed. ATS should also establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. ATS should provide detailed information about the operation of their systems to the SEC, including data in 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 operate in a manner that is consistent with the broader regulatory structure of the securities market , which would benefit individual investors by promoting fair and transparent trading practices. ATS should implement a variable minimum pricing increment model for both quoting and trading of NMS which would further promote fair and transparent pricing across various trading venues, ultimately benefiting investors. The proposal to implement a variable minimum pricing increment model for both quoting and trading of NMS stocks would promote fair pricing across trading venues which is essential for ensuring a level playing field for all investors. Plus, estimated savings for retail investors range from $1.12 billion to $2.35 billion, primarily through increased competition to supply liquidity to marketable orders. The SEC should prioritize creating a competitive market structure that benefits investors and encourages transparency. The SEC should also not permit PFOF (payment for order flow) to be allowed in the markets since it undermines all efforts for a fair and transparent market.