Dec. 27, 2022
December 27, 2022
I would like to start by acknowledging that this proposal is a huge improvement over our current system. I personally believe that the proposed rule adds some unnecessary complexity and prefer the simpler trade-at rule over this auction style system. With that being said this proposal does improve market efficiency and reduce systemic risks. As we saw in early 2021 the lack of order competition led to many firms that internalize orders to take on amounts of risk that were near catastrophic. These internalized orders do not hit the lit market and can prevent the price from reflecting true demand. This prohibits price discovery and leads to situations where a firm could take on enough risk to cause significant contagion potentially harming the entire economy.