Mar. 22, 2023
Vanessa A. Countryman, Re: Order Competition Rule, File No. S7-31-22, Release No.34-96495 I want to voice my support of the order competition rule but with one exception. The described rule allows routing from a broker to a market maker prior to order submissions being routed to the Auction aspects of the order. The Market makers have a history of front running trades, and utilizing the data gathered from retail market submissions to commit egregious abuses for material gain. Forcing market participants to auction for orders gives the ability for actual price discovery to take place; a welcome change to watching Market Makers internalize buy orders and route sell orders to lit exchanges to assist their hedge fund's overleveraged short positions and put options. It is a massive conflict of interest to allow a market making entity to have it's own hedge fund. The penalties for violating FINRA/SEC regulations MUST be more than just fines. Once a fine is paid to the regulatory authority the guilty party doesn't even have to plead guilty, they pay the fine without admitting or denying wrongdoing. It is an embarrasment to these capital markets, the founding principles of capitalism and a mockery of the idea of a free market. What is happening to Silicon Valley Bank, Credit Suisse (CDS skyrocketing and contagion all but inevitable) and other massive "too big to fail" financial entities is a direct result of our current consequence structure for rule violation. Regulatory capture, the influence of lobbyists on politicians and even the campaign donation structure of America are the culprits for the massive financial nightmare that is taking place in America. It is time for rules to be passed that grant household investors the opportunity to play on a slightly more equal playing field. Supply and demand needs to have an actual role in price discovery. The concept that infinite liquidity is something securities should have and be provided by creation baskets of ETFs, results in the Short Interest of these ETFs to skyrocket but to no consequence for the Authorized Participants with these creation/redemption privelages. The securities extracted from these baskets may then be used to short sell companies, and to act as a share that can be used as a "locate" to stave off the consequences of having an FTD (failure to deliver) on a stock. Securities that are held in retirement accounts cannot be directly registered to the names of their shareholders, and as a result are also used as a resource to satisfy Failure to Delivers in the market, providing even further encouragement for Market Makers to naked short sell stocks into delisting and insolvency. It's time for household investors to have their orders routed to lit exchanges and to actually contribute to meaningful price discovery. Thanks for reading, C. Shepherd