Mar. 31, 2023
Dear SEC, I am writing to express my support for the new rule proposal that ensures fair competition and equal opportunity for all market participants. Specifically, I support the rule that prevents Citadel from being the first to receive orders, instead directing orders to a public auction where all parties, including pension funds, have an equal opportunity to fill the order. In addition, I believe that Payment for Order Flow (PFOF) should be banned in US markets, as it has been in the UK, due to concerns about conflicts of interest. Brokers who do not accept PFOF should route orders differently, and a recent study found that retail investors who do not deal with PFOF get a better price than those who do, violating FINRA's Best Execution guidance. The Commission should also investigate conflicts of interest among market participants to ensure that they can objectively review the rules. Additionally, enforcement of SEC rules should be improved 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. Dark pools, or Alternative Trading Systems, should provide quotes and trades to consolidated market data to increase transparency. The SEC should also address the unfair information advantage of wholesalers by having brokers route orders to the auction first and specify where the order should go if the auction is unsuccessful. Wholesalers exercise extreme influence on other market participants, and there are conflicts of interest that may infect the ability of some participants to objectively review the rules. Furthermore, TD Ameritrade's order routing decisions do not appear to be motivated by competition, despite what they state on their website. They pay to get the first look at orders, routing them to firms that net themselves billions of dollars in the process. The state of American markets is anti-competitive, and fair competition is essential. The Commission needs to ensure fair competition, especially within the off-exchange systems that currently dominate. Wholesalers are taking billions from individuals and institutions and calling it "superior performance" while lying about the quality of their services to maintain their profits. Removing profiteering 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. In summary, I urge the SEC to ensure fair competition by reducing monopolistic behavior and removing profiteering middlemen from the market. The proposed rule to bring more transparency to dark markets should be implemented as soon as possible, and the Commission should investigate conflicts of interest among market participants to ensure that they can objectively review the rules. Thank you for considering my comments. Sincerely, Jake Macfarlane Macfarlane LegalWorks Jake W. Macfarlane 257 East 200 South Ste. 21 Salt Lake City, Utah 84111