Mar. 12, 2023
As an investor, I strongly believe that access to the best priced quotations available in the national market system should be available to all investors. Competitive market forces should determine the prices in the market, and no market participant should have a monopoly on the retail order flow. Recently, there has been a proposal to require certain market participants to utilize a specific trading protocol, which has been recommended to be withdrawn by Citadel, among other reasons, due to its unprecedented nature. As an investor, I prefer to pay a commission rather than sending my orders to a wholesaler for internalization, especially one that has been front-running customer orders since 2006. My concern is that brokers may start charging outrageous commissions or fees in lieu of payment for order flow (PFOF). Therefore, I would recommend that a cap be placed on the amount of commissions or fees that brokers are allowed to charge. I trust the Economic Analysis conducted by the SEC, which estimates that the proposed changes could save retail investors from $1.12 billion to $2.35 billion on transaction costs. Increased competition to supply liquidity to marketable orders of individual investors will lead to lower transaction costs for individual investors, potentially enhance order execution quality for institutional investors, and improve price discovery. In a Youtube video published by the SEC Historical Society, Dr. Richard R. Lindsey, a former division director, stated that competition is the key to regulating markets and that barriers to competition must be removed to allow it to exist. Payment for order flow, with its conflicted nature, is one such barrier to competition. In conclusion, I urge the SEC to consider the benefits of increased competition and transparency in the market and to regulate against monopolies and conflicted trading practices, such as PFOF, that harm the interests of individual investors.