Apr. 01, 2023
Dear Sir or Madam, As a concerned retail investor, I am submitting my comments on United States SEC file no. S7-32-22. It is imperative that the SEC reduces conflicts of interest by increasing transparency in the routing of orders by brokers and wholesalers, with investors having access to the best-priced quotations available in the National Market System (NMS). The proposed changes to Alternative Trading System (ATS) rules promote better alignment with regulatory frameworks for exchanges, which would be beneficial for individual household investors. 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. This would make it easier for investors to understand how ATS operate and how their orders are executed. Furthermore, ATS should establish and enforce written policies and procedures to prevent fraudulent and manipulative practices. This would help to protect individual investors from abusive practices in the ATS market. ATS 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. 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 markets, which would benefit individual investors by promoting fair and transparent trading practices. 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. Household investors support any initiatives aimed at identifying and preventing fraudulent practices that undermine the credibility, integrity, and functionality of American markets. Sending orders to a wholesaler for internalization should not be the only option available to investors. Brokers may charge high commissions or fees in lieu of Payment for Order Flow (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. The SEC should also ensure that the ATS operates in a manner consistent with the broader regulatory structure of the securities markets, which would benefit individual investors by promoting fair and transparent trading practices. Sincerely, Amanda Kappes