Dec. 26, 2022
December 26, 2022 This is the most important rule of the 4 proposed on December 14th. Although the auction system is not perfect, it is a giant step in the right direction. The reporting that would be required, allowing other firms to bid on orders before they are internalized, adds an unparalleled level of transparency to the market. The internalization of orders in Wholesale firms like Virtu Financial and Citadel Securities creates a huge conflict of interest. This conflict of interest creates an ecosystem with misaligned incentives, setting all Participants up for disaster. These Wholesale firms are able to amass MASSSIVE amounts of market power through internalization, as it allows them to funnel orders off exchanges and into the dark market. This COMPLETELY eliminates any price impact from these orders, as they NEVER HIT THE EXCHANGE. The orders do not affect the supply or demand for the security on the open market, since these Wholesale firms were able to internalize your order then Fail to Deliver the security they \"sold\" you. Retail investors are being robbed in broad daylight. This rule will bring this robbery to the foreground and I vehemently support it. Free and Fair markets require transparency and price discovery.