Mar. 12, 2023
Hello, I hope this finds you well. Investors should have access to the best priced quotations available in the national market system and such prices generally should be determined by competitive market forces. It shouldn’t be possible to pay billions of dollars for retail orders for the ability to control everything in that entire market. Citadel recommended withdrawing this proposal for a number of reasons, including the unprecedented nature of requiring certain market participants to utilize a specific trading protocol. Sending my orders to a wholesaler to be internalized is a specific trading protocol that I’d rather pay commission to be able to avoid. A wholesaler such as Citadel who has been front-running customer orders since 2006 shouldn’t have a monopoly on retail order flow. My only concern is that brokers will start charging outrageous commissions or fees in lieu of PFOF, so I’d recommend a cap on the amount of commissions or fees that the brokers are allowed to charge. I trust the Economic Analysis done by the commission and I look forward to retail saving from $1.12 billion to $2.35 billion on transaction costs. These estimated gains would be generated primarily through increased competition to supply liquidity to marketable orders of individual investors, which in turn would lower transaction costs for individual investors, potentially enhance order execution quality for institutional investors, and improve price discovery. The SEC Historical Society has a Youtube video titled Regulation and Market Structure from ATS to NMS published June 1 2018. At 35:09, Dr. Richard R. Lindsey, division director from 1995 - 1998 states “Really what you wanted was competition in the marketplace. And that competition really regulated markets much better than the SEC could. We didn't view it as our job to design the market, we viewed it as our job to try to allow more competition to exist.. To let competition exist you actually have to remove the barriers to competition that exist”. I agree with this. One barrier to competition is the conflicted nature of PFOF. Best regards Matthias Hübers