Jan. 31, 2023
January 31, 2023 The sending of orders to auction presents a concern of preventing proper, timely price discovery at the discretion of self-interested market makers, broker-dealers or other involved parties. The purpose of the NBBO was to ensure that individual investors were not being taken advantage of. However, simply getting the best price for an individual trade is only part of investing. Without the process of timely, honest price discovery being respected, the better entry point an individual investor may receive could be compromised or outright made irrelevant. This would mean broker-dealers could bypass the intent of NBBO with more sway over price discovery in the market. If the intent is to rout these trades through an auction system, then broker-dealers should also be required to offer the option of routing trades through lit exchanges with the same ease they offer other routing. This would give autonomy to retail investors, ease potential liability of broker-dealers and also help restore faith in markets.