Apr. 1, 2023
Dear Sir/Madam, I am writing to provide comments on Rule File No. S7-29-22, which relates to the proposed Regulation Best Execution. As a concerned citizen and investor, I strongly support the proposed rule and would like to offer the following comments for your consideration: Best execution is essential for ensuring fair and efficient markets, particularly for individual investors who may not fully understand the complexities involved in trade execution. As such, the proposed rule's focus on promoting best execution practices is commendable and necessary. In order to ensure that retail investors can fully benefit from the proposed rule, it is important that clear guidance be provided on how to read and interpret the data in Regulation MS Rule 605 reports. Retail investors, in particular, may lack a deep understanding of the markets, and providing such guidance would promote transparency and understanding. While brokers have a duty of Best Execution derived from common law agency principles and fiduciary obligations, it is crucial that this duty becomes a rule that the SEC can enforce. Conflicted orders do not belong in a Best Execution rule, and the proposed rule should address this issue. Without a clear Best Execution rule, investors may not be aware of revenue arrangements between brokers and subpar trading firms or that they may be paying higher transaction prices. Different trading venues may offer different prices, slower execution can lead to missed opportunities, information leaks can inhibit a successful transaction, and less reliable settlement processes can delay receipt of proceeds. The proposed Regulation Best Execution is a necessary step in protecting household investors and promoting fair and efficient markets by ensuring that household investors are receiving the best possible execution for their trades. Quarterly reviews of execution quality would provide transparency and accountability for the broker-dealers' practices. In light of recent events such as Robinhood's failure to satisfy its best execution obligation and misleading statements regarding payments received for routing trades to specific firms, as well as Citadel's best execution charges for executing customer trades at less favourable pricing when a better price was available, it is clear that the proposed rule is necessary to promote fair and transparent trading practices. The proposed rule would provide a more detailed and comprehensive standard for broker-dealers to follow, resulting in consistently robust best execution practices. As such, I urge the SEC to adopt the proposed Regulation Best Execution as soon as possible. Thank you for considering my comments. Sincerely, Amanda Kappes