Mar. 31, 2023
March 31, 2023 I am writing in support of this proposal that improves transparency and fairness in the markets for all participants, particularly household investors. The current near monopolic system heavily favors large firms which decreases fairness and degrades the experiences of household investors despite the claims of benefits to retail investors by wholesalers. Public, transparent auctions with real competition should be the basis of any market and any deviation from that is destructive for participants. Wholesalers are middlemen who benefit from the current system claim to offer significant price improvements for smaller investors, but the reality is that the price improvement is negligible and they are pocketing most of the price improvements of billions of dollars per year that could have been saved by household investors and pension funds for true price improvement. Removing middlemen from any market eliminates markups and obscurity while improving the product and price for the end user. It is time to do the same for the US stock market. Citadel Securities wrote letter to the SEC in 2004 when internalization was being considered and foretold the bleak future of the markets if internalization was to be allowed. The prime concern was for the abnormal widening bid-ask spreads and decreasing liquidity which would have the downstream effects of monopolization of order flow and substantially poor execution for all retail and institutional investors which would ultimately lead to corroding the value of the market. Market makers have solved the issue of decreased liquidity by compensating excessively with artificial liquidity but the letter turned out to be extremely insightful in terms of effects on the overall market. Markets and their investors are being harmed by the practice of internalizers and rules such as the 2023 Order Competition Rule should be fully supported by anyone who wants a fairly functioning market. Internalizers have weakened the markets and it is encouraging to see steps taken in the right direction. To again quote Citadels 2004 letter, the long-term impact of internalization is so corrosive to our national system that the Commission should take every possible step to curtail this business process. The markets have indeed been corroded and it is time to take steps to repair them. I reiterate my full support for this proposal.