Mar. 13, 2023
To whom it may concern, Please find my comments in response to this proposed rule: The effectiveness of any SEC regulation depends on how well it is enforced. I believe that imposing higher fines, which act as a significant deterrent, is necessary, and some broker-dealers should have their licenses revoked instead of receiving fines that are merely a cost of doing business. I fully endorse this regulation and urge its prompt implementation.I strongly support any initiatives aimed at curbing fraudulent practices that undermine the credibility, integrity, and functionality of American markets.I appreciate and fully endorse any measures to reduce incentives and prevent the exploitation of individuals' orders for rebate money. The current broker routing system, which involves multiple parties and grants wholesalers a significant information advantage over other market participants, should be simplified to ensure equal knowledge throughout the market. Brokers should first route orders to the auction and specify where they should go if the auction is unsuccessful to address this information asymmetry issue. I am in favor of rule changes that increase transparency in dark markets. The current regulation requires Alternative Trading Systems (ATS) to provide quotes and trades to consolidated market data if they operate as an auction, which is a step in the right direction. The investing public should have easy access to market information, and I fully endorse any efforts to promote transparency. Furthermore, I would be willing to pay a higher price per share to avoid being routed through a wholesaler that has been charged over 70 times by the US government. In particular, I would prefer to pay a commission rather than be routed through a firm like Citadel Securities that has a history of disregarding the law. The parties involved in this routing process have evident conflicts of interest, especially considering that Citadel is a significant source of funding for many broker-dealers and is the largest customer of the NYSE. This raises concerns about the potential influence of wholesalers on other market participants' objectivity in reviewing regulations. Extensive research has demonstrated that internalization is detrimental to the market. Wholesalers are not being honest about the quality of their services and are taking billions of dollars from individuals and institutions. For example, data from the CAT show that on average, 51% of shares of individual investor marketable orders internalized by wholesalers are executed at prices less favorable than the NBBO midpoint. These middlemen are merely profiteering from transactions that would otherwise occur, and I believe that the money saved by eliminating them could be better utilized in pension funds rather than lining the pockets of Wall Street billionaires. Removing the profiteering middlemen from the market would undoubtedly improve prices for individuals and institutions, including pension funds. Recent research suggests that the proposed rule changes could save individuals billions of dollars currently taken by wholesalers and save institutions over $1.5 billion each year. Wholesalers are taking money from citizens and pension funds, and it is time to put a stop to this. I appreciate your consideration. Kind regards, Max Garaffa