Mar. 31, 2023
As a household investor I support this rule that states that Citadel and other market maker/hedge funds cannot be the first to receive orders; instead, orders must go to a public auction where everyone, including pension funds, have an equal opportunity to fill the order. It makes no sense to give these hybrid market maker / hedge fund corporations a competitive advantage. A public auction gives everyone an even playinging field to compete for orders. Payment for Order Flow (PFOF) is a major conflict-of-interest. Allowing certain institutions to be able to buy their way into an advantageous optic of the markets does not align with a free and fair market for all participants. Brokers who do not accept any kind of PFOF route orders differently and consequently see superior execution quality. Retail investors not dealing with PFOF get a better price than those dealing with it, violating FINRA's Best Execution guidance. FINRA is evaluating the impact of not charging commissions on member firms' order-routing practices and decisions, and the findings should be made public. 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. Dark pools (Alternative Trading Systems) 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. 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 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. 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 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. The Commission should ensure fair competition by reducing monopolistic behaviour and removing profiteering middlemen from the market. Also by preventing institutions with market maker privileges from also operating hedge funds. The proposed rule to bring more transparency to dark markets should be implemented as soon as possible. The SEC cannot afford to placate the bad actors pushing against market transparency and efficiency. Trust in wall street is crumbling every year. We need these rule proposals expedited and enforced with ferocity. The SEC should investigate conflicts of interest among market participants to ensure that participants can objectively review the rules. Self Enforcement sounds great in a perfect world but we all know that loopholes are abused every single day. Enforcement of SEC rules needs to be improved with higher fines to serve as a significant deterrent for breaking the law. If a fine does not exceed the amount that was generated by a rule breaking institution then there is no reason for the rule breakers to stop. It just becomes a cost of doing business. Some broker-dealers should lose their licenses instead of receiving fines that amount to a cost of doing business. They should be barred from the ability to participate. institutions with multiple fines on record should receive an exponentially greater punishment. Sincerely, A concerned household investor