Mar. 31, 2023
Dear Ms. Countryman, As an individual retail investor, I thank you for the effort to create more competition and transparency in the market, and I appreciate the opportunity to comment on these proposals. In aggregate, these recommended enhancements (inclusive of File No. S7-30-22, S7-31-22, S7-32-22, comments submitted sepcor) constitute one of the most significant changes to U.S. equity market structure since Regulation NMS was implemented in 2005. This is a very encouraging step forward. I would hate to see these rules watered down with exceptions, excessively narrow re-definition, and loose language. Disclosure of Order Information S7-29-22 The Commission is proposing changes to rule 605 of Regulation NMS to include more information about broker executions. Currently, brokers have to file 606 reports quarterly. In Dec 2022: FINRA, along with the SEC, sent out risk alerts regarding the lack of compliance with the 606 reports. In the report FINRA cited a list of issues with the 606 reporting compliance. The findings consisted of firms publishing inaccurate information in the quarterly report on order routing. There were also issues with Incomplete Disclosures – Not adequately describing material aspects of their relationships with disclosed venues in the Material Aspects disclosures portion of the quarterly report. While I do support the idea and definitely agree with the need to be more transparent, one would expect brokers to be as non-compliant with the new 605 reports, and this will provide little to no benefit to retail. The 605 reports are only as useful as the accuracy of data it contains. Again, these rules would have to be appropriately enforced. As compliance to date has been embarrassingly low, the Commission should make it a priority to increase fines and penalties for violations. The lack of compliance with 606 reports communicates a tendency for funds and firms to send out bad data to obscure their own situation. Companies that sell market data are then damaged, as faith in the markets overall are damaged. Why pay for data if it’s full of lies? I think it’s imperative that the Commission take these steps in order to start gaining back confidence and trust from the public. Seeing what happened with Gamestop eroded Investor Confidence so much that Investors have been taking their shares out of the system to hold them with a Transfer Agent. And due to the recent trouble in regional banks, the greater public is increasingly realizing the very serious and threatening difference between owning an asset and owning the right to an asset. Every rule the SEC passes is only as good as the enforcement that backs it. Overall, I want to see higher fines that actually serve as a deterrent. I think some broker-dealers should lose their licenses instead of receiving fines that amount to nothing more than a cost of doing business - a cost that is often outweighed by the ill-gotten gains obtained through “honest mistakes”. Restoring - and protecting - faith in the U.S. markets is more critical than ever. I am sure this letter will be carefully considered. Thank you for the opportunity to comment. Regards, Lou Shogry Household Investor American Citizen and Taxpayer