Mar. 12, 2023
Dear Securities and Exchange Commission, I am writing to express my full support for the proposed rule, File No. S7-31-22, Release No.34-96495, and to offer some additional comments and suggestions. Firstly, I agree that every rule the SEC passes is only as good as the enforcement that backs it. Therefore, I urge the SEC to increase fines and take stronger enforcement actions against broker-dealers who engage in market manipulation, rather than merely imposing fines that amount to nothing more than a cost of doing business. In some cases, it may be necessary to revoke the licenses of broker-dealers who repeatedly engage in such activities. I fully support the efforts to reduce the speed games that damage the integrity, credibility, and functioning of American markets. It is also encouraging to see the SEC taking steps to reduce inducements and "farming" of individuals' orders for rebate money. I share the concern that the current market structure is anti-competitive, with a small group of off-exchange dealers capturing a disproportionate amount of the marketable orders of individual investors in NMS stocks. The proposed rule is an important step towards promoting fair competition, and I would like to see the SEC take further action to address monopolistic behavior and promote transparency in the market. I believe that routing orders first to a wholesaler, who then passes them to the auction, is unnecessarily complex and grants the wholesaler an unfair information advantage against other market participants. Instead, brokers should route orders directly to the auction and specify where the order should go if the auction is unsuccessful. This would ensure that the entire market has equal knowledge and prevent some market participants from benefiting from an unfair advantage. I also strongly support the proposed rule changes that would bring more transparency to dark markets, and I agree that the fragmentation of the markets only benefits large, dominant players. A more simple, transparent, and free market structure, as proposed in the rule, would be preferable. Regarding wholesaler practices, I agree that there are clear conflicts of interest and that the parties involved have been charged numerous times by the United States government. Wholesalers exercise extreme influence on other market participants, and I am concerned that this influence may compromise the ability of some participants to objectively review the proposed rules. Internalization is bad for markets, and wholesalers are often lying about the quality of their services to maintain their profits. It is unacceptable that wholesalers are taking billions from individuals and institutions and calling it "superior performance." Removing profiteering middlemen from the market would improve prices for both individuals and institutions and prevent money from going to Wall Street's overstuffed pockets. Recent research suggests that the auctions would save individuals and institutions billions of dollars taken by wholesalers, and this needs to stop. In summary, I fully support the proposed rule and urge the SEC to take stronger enforcement actions against broker-dealers who engage in market manipulation. I believe that promoting fair competition and transparency in the market, and removing profiteering middlemen, would benefit investors and prevent market manipulation.