Mar. 31, 2023
I am writing to express my strong support for the new rule that mandates orders to go through a public auction, ensuring equal opportunity for all participants, including pension funds, to fill the order. As a concerned investor, I believe this rule is essential to address the rampant issue of Payment for Order Flow (PFOF) and restore fair competition in the financial markets. PFOF has already been banned in the UK due to conflict-of-interest concerns, and it is time for the US to follow suit. Brokers that do not engage in PFOF have demonstrated superior execution quality, and a recent study has shown that Robinhood, which relies on PFOF for approximately 70% of its revenue, does not provide statistically significant price improvement relative to exchanges. Retail investors who do not deal with PFOF receive better prices, which is a violation of FINRA's Best Execution guidance. Furthermore, the findings of FINRA's evaluation of the impact of not charging commissions on member firms' order-routing practices and decisions should be made public to ensure transparency. TD Ameritrade's order routing decisions appear to be driven by other factors than competition, as they pay to get the first look at orders and route them to firms that profit billions of dollars in the process. Dark pools, or Alternative Trading Systems, should be required to provide quotes and trades to consolidated market data to increase transparency in dark markets. The Commission must address the unfair information advantage of wholesalers by requiring brokers to first route orders to the auction, specifying an alternative destination only if the auction is unsuccessful. The current state of American markets is anti-competitive, and the Commission must ensure fair competition, particularly within the off-exchange systems