Mar. 20, 2023
From: Anthony Lee Sent: Monday, March 20, 2023 3:23:19 AM (UTC-05:00) Eastern Time (US & Canada) To: Rule-Comments Subject: File No. S7-31-22; Release No. 34-96495: Order Competition Rule Dear SEC, I am writing to express my strong support for File No. S7-31-22, Release No. 34-96495, regarding the Competition Rule. The proposed rule seeks to address the problem of monopolistic behavior that has plagued the US markets for far too long. It represents a significant step towards ensuring fair competition and transparency in the off-exchange systems that currently dominate the market. It is no secret that Payment for Order Flow (PFOF) has been a contentious issue in the financial industry. The UK has already banned PFOF due to conflict-of-interest concerns, and I strongly believe that the US markets should follow suit. Brokers who do not accept any kind of PFOF route orders differently and see superior execution quality. However, a recent study found that Robinhood, despite being responsible for around 70% of its revenue, does not provide statistically significant price improvement relative to exchanges. This violation of FINRA's Best Execution guidance is a troubling indication of how pervasive conflicts of interest are in the US financial system. Moreover, TD Ameritrade's order routing decisions, despite what they state on their website, are not motivated by competition. They pay to get the first look at orders, routing them to firms that net themselves billions of dollars in the process. This kind of behavior undermines fair competition and highlights the need for greater transparency in the markets. The state of American markets is anti-competitive, and fair competition is essential. Wholesalers exercise extreme influence on other market participants, and there are conflicts of interest that may infect the ability of some participants to objectively review the rules. The proposed rule to bring more transparency to dark markets is a necessary step towards addressing this issue. Dark pools (Alternative Trading Systems) should provide quotes and trades to consolidated market data to bring more transparency to these opaque markets. The auctions proposed in the new rule will save individuals billions of dollars taken by wholesalers, who have been profiting off their market power for far too long. Removing middlemen from the market will improve prices for both individuals and institutions, such as pension funds. The Commission needs to ensure fair competition by reducing monopolistic behavior and removing profiteering middlemen from the market. In conclusion, I urge the SEC to take bold action to address the systemic problems facing the US financial markets. The Commission should investigate conflicts of interest among market participants and ensure that participants can objectively review the rules. Enforcement of SEC rules needs to be improved with higher fines to serve as a significant deterrent for breaking the law. Some broker-dealers should lose their licenses instead of receiving fines that amount to a cost of doing business. Thank you for considering my views.