Mar. 31, 2023
Chairman Ginsler, I am concerned that a select few market makers have been routing order flows to their darkpool exchanges and therefore have an advantage in filling an order. Orders should go onto a public auction where everyone including pension funds have an equal opportunity to compete for orders. This is, after all, a free and fair market that is supposedly the "envy of the world." Payment for order flow has been effectively banned in multiple countries including the UK due to conflict of interest concerns. This conflict of interest is most evident in the case of Citadel Securities, which both functions as a market maker and runs a hedge fund. Brokers who do not accept payment for order flow route orders differently and see superior execution quality. Moreover, Recent studies suggest that payment for order flow brokers do not in fact contribute to significant "price improvement" for household investors. It's actually the opposite. Dark pools are exactly that -- hidden, non transparent off exchange routing systems that presumably are used to manipulate the price on the lit markets. They should be banned altogether. Moreover, these wholesalers that use payment for order flow exercise extreme and unnecessary influence on other market participants. The Commission should ensure fair competition by reducing monopolistic practices by removing profiteering middle men from the market. Penalties for violating the aforementioned should be more than a simple fine. They should lose their licenses as broker dealers altogether. As a physician if I were to keep violating medical license laws, I would be stripped completely of my ability to practice. Similarly, these bad actors should not be allowed to participate in fair and free markets. -- Mark Anthony Coomes, M.D