Mar. 31, 2023
Points to make: Enforcement of SEC rules is critical for their effectiveness. Thus, higher fines that serve as a significant deterrent are necessary. Instead of receiving fines that are mere costs of doing business, some broker-dealers should lose their licenses. The proposed rule should be implemented promptly. Reducing speed games that damage the integrity, credibility, and functioning of American markets is essential. Similarly, efforts to reduce inducements and the ‘farming’ of individuals’ orders for rebate money should be supported. The current practice of routing orders first to a wholesaler, who then passes them to the auction, which might route it back to the wholesaler, is unnecessarily complex and grants the wholesaler an unfair information advantage against other market participants. To address this disadvantage, brokers should first route orders to the auction and specify where the order should go if the auction is unsuccessful, providing the entire market with equal knowledge. Transparency in dark markets is crucial for the investing public. Thus, changes that bring more transparency to dark pools, such as forcing them to provide quotes and trades to consolidated market data if they wish to operate as an auction, are commendable. Competition is vital for the protection of investors and the maintenance of fair and orderly markets. Unfortunately, the Commission has not been ensuring fair competition, especially in off-exchange systems that currently dominate. The proposed rule is an essential step towards fair competition. The state of American markets is anti-competitive, and monopolies are prevalent, with a small group of six off-exchange dealers capturing 90% of marketable orders of individual investors in NMS stocks. The proposed rule is an important step in the direction of fair competition. Fragmentation of markets only benefits large, dominant players. A more simple, transparent, and free market structure, as proposed in this rule, is preferable. Wholesalers have numerous conflicts of interest and have been charged with numerous violations. I would gladly pay more per share to avoid being routed through a wholesaler like Citadel Securities. Internalization is bad for markets, and wholesalers have been lying about the quality of their services to maintain their profits. Wholesalers are profiteering middlemen that exist to take their cut of transactions that would otherwise occur. Removing them from the market will improve prices for both individuals and institutions. Recent research by Hittal Mittesh suggests that on top of the Commission's estimate that the auctions would save individuals from billions of dollars taken by wholesalers, it would also save institutions over $1.5 billion each year. Overall, the proposed rule is a significant step in the right direction, and I support its implementation. MacKenzie Marchant, concerned citizen and retail investor