Mar. 12, 2023
To whom it may concern, As a household investor - I strongly support this proposal. I am writing regarding the proposed rule change which would circumvent order internalization at market makers like Citadel in favor of public auction. It seems self-evident to me that in the name of providing liquidity, market makers like Citadel Securities are effectively given extraordinary privileges when it comes to selling securities. 1. Market makers like Citadel have line items in their financial forms which say “Securities Sold Not Yet Purchased” and this amount can be in the billions of dollars. This is patently absurd - in what other industry are you allowed to sell something you don’t own? This is fraud masquerading as “providing liquidity”. I urge the SEC to completely disallow this going forward. 2. Failures-to-Deliver - continuing of the previous point, market makers like Citadel are allowed to sell a security and then fail to deliver it. How on earth is that legal? If I sell a house and then fail to deliver it, I would lose my real estate license. Yet, a firm like Citadel securities is allowed to not just continue operations, do it with a slight fine. An FTD should be grounds for losing your ability to trade, not an acceptable part of securities transactions. 3. All order should go to lit exchanges period, full stop. There should be absolutely no routing to internalization mechanisms, dark pools etc. Any reasoning provided is simply the beginning of the slippery slope to monopolies and hurting household customers. Without orders going to lit exchanges, there can be no price discovery, and without true price discovery, there is no point to markets. Market makers are not improving prices - they are deciding prices. I sincerely thank you for your time and consideration in reading this email. Sincerely Rohit Banerjee