Mar. 19, 2023
March 19, 2023
Hello SEC,
I am a household investor and I am in favor of this new rule.
It baffles me as to how the brokers expect to serve their clients need for best pricing when they automatically pitch the order to a wholesaler. This lack of competition for order flow limits the exposure of the available market pricing and potentially hides the trade from price discovery, if internally filled. Having the trades on the lit market would expose the trading volume to the light of day and better ensure proper price discovery.
I would add that two things about the rule concern me. First, the exception for Segmented Orders equal to NBBO. How is this exception going to be enforced? Is it going to be self-regulated by the broker? If so, then its foolish to expect brokers to not abuse the exception and undermine the intent of this rule. I would recommend reconsidering this exception.
Second, I would propose that the rule does not go far enough. Dark pools and exchanges should be eliminated entirely. They are a relic of antiquated trading techniques from back when paper trading was dominant. Now, with computerized trading, all orders can be traded on lit exchanges regardless of whether they are segmented orders or not. All trades should see the light of day in order to maintain an educated retail market and not give an asymmetric knowledge advantage to internal market makers and brokers.
- Jeremy