Mar. 12, 2023
As it currently stands, some market participants benefit from a dominant, anti-competitive position in the marketplace. They pay for order flow or secure it through backroom deals. Why can't orders compete in lit markets? Thankfully, it appears the Commission has realized this. I would like to draw your attention to Title 15 U.S.C. 78k-1 - National market system for securities; securities information processors. I've highlighted paragraph (a)(1)(C)(v) of this section as it explicitly states: (C)It is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure— (i)economically efficient execution of securities transactions; (ii)fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets; (iii)the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities; (iv)the practicability of brokers executing investors’ orders in the best market; and (v)an opportunity, consistent with the provisions of clauses (i) and (iv) of this subparagraph, for investors’ orders to be executed without the participation of a dealer. The parties involved have very clear conflicts of interest. Citadel is a large source of funding for many broker-dealers and is, for example, the NYSE's biggest customer. Wholesalers exercise extreme influence on other market participants and I am concerned that influence will infect the ability of some participants to objectively review these rules. I would have no problem with paying a commission to keep my transactions from being routed through wholesalers, especially ones with records of disregarding the law such as Virtu Financial and Citadel Securities. Respectfully, Brian C. Houchin