Mar. 31, 2023
March 31, 2023 The proposed Order Competition Rule S7-31-22 aims to ensure that investors have access to the best prices available in the national market system, determined by competitive market forces. It should not be possible for any market participant to control the entire market by paying billions of dollars for retail orders. Wholesalers like Citadel, who have been front-running customer orders since 2006, should not have a monopoly on retail order flow. While Citadel recommended withdrawing the proposal, citing concerns about requiring certain market participants to use a specific trading protocol, I prefer paying commissions to avoid sending my orders to a wholesaler to be internalized. However, I am concerned that brokers may start charging exorbitant commissions or fees in place of PFOF. Therefore, I recommend placing a cap on the amount of commissions or fees that brokers can charge. Based on the commission's economic analysis, I trust that the proposed rule will benefit retail investors by saving them between $1.12 billion and $2.35 billion in transaction costs. Increased competition to supply liquidity to marketable orders of individual investors should lower transaction costs for them, potentially improve order execution quality for institutional investors, and enhance price discovery