Mar. 19, 2023
Dear SEC Officials, As a concerned citizen and market participant, I believe that the success of any rule passed by the SEC is heavily reliant on the strength of its enforcement. Therefore, I implore you to implement a stricter regulatory regime that imposes more severe fines as a significant deterrent. It is my conviction that broker-dealers who engage in illicit activities should face harsher penalties, such as the revocation of their licenses, rather than receiving fines that amount to little more than a cost of doing business. I would like to express my full support for the proposed rule and urge you to implement it as soon as possible. I applaud any efforts to curb the speed games that tarnish the integrity, credibility, and functioning of American markets. Additionally, I fully appreciate the SEC's endeavors to reduce inducements and the 'farming' of individuals' orders for rebate money. I believe that a broker routing orders first to a wholesaler, who then passes them to the auction, which might route them back to the wholesaler, is an unnecessarily complex process that grants the wholesaler a profound information advantage over other market participants. This unfair advantage must be addressed by having brokers route their orders first to the auction and specify where the order should go if the auction is unsuccessful, thus ensuring equal knowledge for all participants. Transparency is essential to the proper functioning of markets. Therefore, I wholeheartedly endorse the SEC's rule change that requires dark pools (Alternative Trading Systems) to provide quotes and trades to consolidated market data if they wish to operate as an auction. It is vital that the investing public has easy access to what is happening within the markets. In the interest of the protection of investors and the maintenance of fair and orderly markets, it is crucial to ensure fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets. For far too long, the Commission has not been promoting fair competition, particularly within the off-exchange systems that currently dominate. Thus, it is heartening to see that the Commission is beginning to take its mandate more seriously. Monopolies are detrimental to the proper functioning of markets, and it is evident that there is clear monopolistic behavior within the current system. The Commission's findings reveal that 90% of marketable orders of individual investors in NMS stocks go to a small group of six off-exchange dealers, and 66% of those orders are captured by just two firms. These figures are likely even higher for specific stocks. Such a state of affairs is patently anti-competitive and must be rectified. The proposed rule is an essential step toward fair competition in the marketplace. It is vital to prioritize true competition, and it is encouraging to see that the SEC is doing just that. It is abundantly clear that some market participants are benefiting from a dominant, anti-competitive position in the marketplace, and it is imperative to enable orders to compete in lit markets. The fragmentation of the markets makes things excessively complicated and benefits only the large, dominant players. I prefer a more simple, transparent, and free market structure like the one proposed in this rule. I am deeply disturbed by the conflicts of interest that exist among the parties involved in the current system. Wholesalers exercise extreme influence on other market participants, and I am concerned that this influence will infect the ability of some participants to objectively review these rules. Citadel Securities, for example, is a large source of funding for many broker-dealers and is the NYSE's biggest customer. I would gladly pay more per share or pay a commission to avoid being routed through a wholesaler, especially one with a long record of flouting the law like Citadel Securities. Research has shown that internalization is harmful to markets, and it is disconcerting that wholesalers are lying about the quality of their execution. This practice misleads investors and should be strongly discouraged. I urge the SEC to remain vigilant in monitoring these practices and taking swift action against any violators. In conclusion, I strongly support the proposed rule and urge the SEC to adopt it as soon as possible. The rule will increase transparency, promote fair competition, and help restore trust in the American markets, and beyond. I believe that it is crucial for the SEC to continue to take steps to ensure the integrity of the markets and to protect investors. Thank you for your time and attention.