Mar. 01, 2023
March 1, 2023 I welcome the fact that SEC is finally looking into malpractice in our Equities Markets. Far too long has the process of Payment for Order Flow (that was used heavily by Madoff) been a part of the Equities Markets. How many trillions of dollars did household investors lose to being undercut by predatory Market Makers? It has been proven time and time again that PFOF routing does not guarantee best execution quality, despite all the Market Maker-sponsored papers \"showing\" the opposite (hint: \"Theoretical\" price improvements don't matter, reality, researched by many entities such as IEX, WeTheInvestors, etc., paints a different picture). I fully support the proposed rule changes as they are a good step forward to unlock true price discovery. Far too long have Market Makers been able to internalize any incoming PFOF orders and redirect them to their ATS facilities to then naked short the security and keep resetting the Failure to Deliver obligations using many tricks that the SEC has been aware of for over a decade. Options Chains activity in securities that have had the greatest PFOF volumes in the past three years suggest heavy use of married puts. Why is SEC not looking into the gigantic problem of predatory naked short selling? The NSCC netting process masks the problem. How many investors are holding FTRs in their brokerage accounts? How does this affect corporate governance and investor participation in corporate actions, such as voting for board proposals, etc? Investors are being robbed in broad daylight. If the SEC can't solve the problem, it should focus on promoting Direct Registration of securities so that they are no longer part of the DTC and ownership is registered directly in book format and on the companies' transfer agent and company ledger. This way investors are sure they are not holding an entitlement to a security that failed to deliver, but an actual, certificated security with full voting and ownership rights. Why is SEC allowing Market Makers to run their own investment arms. What has SEC not learnt from Madoff's demise that prevents them from shutting down companies that are both market makers and investment advisors? How is that not a conflict of interest? Proceed with urgency to heal the Equities Markets Millions of Americans are being robbed in broad daylight.