Mar. 30, 2023
March 30, 2023 The auction concept is an incorrect solution as it creates a two tiered market in which some orders go to auction, others go to the lit exchanges directly, bypassing the orders in the auction. The correct solution is to mandate all orders show in a lit (not dark pool) exchange before going to some alternate venue (PFOF or otherwise). By not showing all incoming orders lit on an exchange first, orders for example that sit hidden between the best bid best offer will NOT get executed by incoming orders as the incoming orders are never made available for execution by the overall market before being sent to an alternate proposed auction. The person, for example, sitting one penny inside the best offer, as a hidden order on an ECN, will never get executed by orders being sent to your new proposed auction as opposed to being flashed in the lit markets, in which case the hidden best offer WOULD be executed, which is what the person placing the order and the person sitting with the hidden order would want. Creating a two tiered system is wrong. All orders should flash in the public markets first before being sent to any alternate venue, such as your proposed auction. Thank you for your consideration.