Mar. 12, 2023
Dear SEC, I am writing in regards to the Order Competition Rule, File No. S7-31-22, Release No. 34-96495. As a household investor, I fully support this rule and I urge you to implement it as soon as possible. I appreciate and support any efforts to reduce the speed games that damage the integrity, credibility, and functioning of American markets. I also deeply appreciate and support any efforts to reduce inducements and to reduce the ‘farming’ of individuals’ orders for rebate money. However, I strongly believe that every rule the SEC passes is only as good as the enforcement that backs it. To make this rule effective, I want to see higher fines that actually serve as a significant deterrent. Some broker-dealers should lose their licenses instead of receiving fines that amount to nothing more than a cost of doing business. Such fines are often outweighed by the ill-gotten gains obtained through “honest mistakes”. Therefore, I urge you to impose tougher penalties on broker-dealers who violate the rules. I am pleased to see that the proposed rule emphasizes fair competition, which is incredibly important. Monopolies are bad, and there is clear monopolistic behavior in the market. The proposed rule is an important step in the direction of fair competition. I believe that fragmentation of the markets makes things overcomplicated in a way that only benefits large, dominant players. I prefer a more simple, transparent, and free market structure like the one proposed in this rule. I strongly believe that removing the profiteering middlemen from the market will improve prices for both individuals and institutions, and the savings will go to citizens and pensions instead of Wall Street's overstuffed pockets. Therefore, I would gladly pay more per share to avoid being routed through a wholesaler with a long record of flouting the law. I would like to express my concern about the involvement of wholesalers in the market. Wholesalers exercise extreme influence on other market participants, and I am concerned that this influence will infect the ability of some participants to objectively review these rules. I would gladly pay commission to avoid being routed through a wholesaler, especially one with a long record of flouting the law like Citadel Securities. In general, I am very concerned regarding Citadel Securities arguments and obvious conflict of interest across many issues within the current market. Research heavily suggests that internalization is bad for markets. Wholesalers are also lying about the quality of their services to maintain their profits. The data clearly demonstrate that wholesalers are taking billions from individuals and institutions and calling it "superior performance". Removing the profiteering middlemen from the market will improve prices for both individuals and institutions - again, I would like to repeat, that I would gladly pay a commission if that meant, my order receives the best and most transparent treatment on the open market, as outlined in this (and many other rules). I do want to see more steps towards a fair market, with some proposals not going as far as possible (f.ex. FTDs), but change happens in small steps and is incremental - I am happy to see the SEC go towards this direction and support these efforts. In conclusion, I urge you to implement the Order Competition Rule with stronger enforcement, and to address the unfair information advantage granted to wholesalers by having brokers first route to the auction and specify where the order should go if the auction is unsuccessful. This will help to ensure that the entire market has equal knowledge. I appreciate your time and consideration on this matter. Sincerely, Peter Kopciak