Mar. 30, 2023
Vanessa Countryman, Secretary, U.S. Securities and Exchange Commission, 100 F Street, N.E, Washington, D.C. 20549 File No. S7-31-22; Release No. 34-96495: Order Competition Rule Dear Ms. Countryman, The proposed regulation aimed at enhancing transparency and competition in the market for NMS stocks is a crucial move in the right direction towards creating a fairer market. The proposed rule's endorsement of public auctions that offer all market participants an equal opportunity to fill orders is especially commendable, as opposed to allowing Citadel the first right. The Payment for Order Flow (PFOF) has been a contentious issue for a long time, and the proposed prohibition of PFOF is a necessary measure to address concerns over conflicts of interest. The study's revelation that Robinhood does not offer statistically significant price improvement, despite PFOF accounting for around 70% of its revenue, is concerning and highlights the need to ban this practice. The proposed rule's concentration on ensuring that broker routing decisions are motivated by competition is a positive step. Brokers who do not accept PFOF should not be disadvantaged, and should be able to route orders differently and achieve superior execution quality. The impact of not charging commissions on member firms' order-routing practices and decisions needs to be assessed, and the results of this evaluation should be made public. The proposed rule to increase transparency in dark markets by mandating dark pools to provide quotes and trades to consolidated market data is another essential measure. Wholesalers wield considerable influence over other market participants, and the conflicts of interest that arise from their profiteering need to be tackled. Eliminating intermediaries from the market will benefit both individuals and institutions by improving prices and saving billions of dollars taken by wholesalers. Overall, the proposed rule is a positive step towards ensuring fair competition and transparency in the market for NMS stocks. The SEC must investigate conflicts of interest among market participants to guarantee that the regulations are objectively evaluated, and the enforcement of SEC rules should be strengthened with higher fines to serve as a significant deterrent for rule-breakers. The Commission should also consider revoking licenses of broker-dealers who repeatedly violate the rules, instead of merely imposing fines that are fractions of the monetary gain. After all, a fine for a crime is a free pass for the wealthy to commit said crime. I hope you take my letter seriously and consider the passing of 34-96495: Order Competition Rule Thank you, Max Knaus