Mar. 31, 2023
Dear Sir/Madam, I am writing to express my support for the proposed Order Competition Rule, which aims to promote fair and open competition in the securities market. In particular, I would like to voice my support for the new rule that requires orders to go to a public auction instead of being routed directly to Citadel, which will provide equal opportunities for all market participants, including pension funds. I strongly believe that Payment for Order Flow (PFOF) should be banned in US markets, similar to what has been done in the UK. Broker-dealers who do not accept any kind of PFOF route orders differently and consequently provide superior execution quality. A recent study found that Robinhood does not provide statistically significant price improvement relative to exchanges, despite PFOF being responsible for around 70% of its revenue. Furthermore, retail investors not dealing with PFOF get a better price than those dealing with it, violating FINRA's Best Execution guidance. It is concerning that some broker-dealers are not motivated by competition, and their order-routing decisions are not transparent. TD Ameritrade's order routing decisions don't seem to be motivated by competition, despite what they state on their website, and they pay to get the first look at orders, routing them to firms that net themselves billions of dollars in the process. This kind of behavior must be addressed to ensure fair competition. Dark pools should provide quotes and trades to consolidated market data to bring more transparency to dark markets. The Commission should address the unfair information advantage of wholesalers by having brokers first route to the auction and specify where the order should go if the auction is unsuccessful. I strongly believe that removing middlemen from the market will improve prices for both individuals and institutions, such as pension funds. The auctions would save individuals billions of dollars taken by wholesalers, and fair competition is essential. To ensure fair competition, the SEC should investigate conflicts of interest among market participants and enforce its rules more effectively with higher fines to serve as a significant deterrent for breaking the law. Some broker-dealers should lose their licenses instead of receiving fines that amount to a cost of doing business. In conclusion, I urge the SEC to implement the proposed Order Competition Rule and ban Payment for Order Flow to promote fair and transparent competition in the securities market. Thank you for considering my comments. Sincerely, Christopher Sheehan Household Investor