Dec. 29, 2022
December 29, 2022 Dear Securities and Exchange Commission, I am writing to express my support for the proposed rule to enhance competition for the execution of marketable orders of individual investors. I believe that requiring certain orders of individual investors to be exposed to competition in fair and open auctions before they can be executed internally is an important step towards promoting transparency and fairness in the market. However, I also believe that the proposed rule should go further in addressing practices that can harm retail investors. Specifically, I believe that payment for order flow (PFOF), dark pools, and failures to deliver (FTDs) should be banned. PFOF is a practice where a broker-dealer receives payment in exchange for routing a customer's order to a particular market for execution. This practice can create a conflict of interest for the broker-dealer, as they may be incentivized to route orders to markets that provide the highest payment for order flow rather than markets that offer the best execution quality for the customer. Dark pools are private exchanges that allow traders to buy and sell securities without revealing their identities or the details of their trades. These exchanges can be used to manipulate securities by allowing large traders to execute trades without revealing their intentions to the market. FTDs occur when a seller fails to deliver the securities that were sold in a trade, which can erode trust in the market and harm retail investors. I also believe that the proposed rule should include measures to strengthen penalties for broker-dealers that engage in these practices. This could include revoking broker licenses for repeated offenses and increasing penalties across the board. Additionally, I believe that the practice of admitting no fault but paying the fees should be ended, as it does not adequately deter these harmful practices. I support the proposed rule, but I believe that the $200,000 limit for segmented orders is far too high. I believe that the limit should be significantly lower in order to ensure that individual investors are protected. Thank you for considering my comments. Sincerely, Stephen