Mar. 31, 2023
As a concerned household investor, I am troubled by recent findings regarding the practices of certain firms in the market securities industry. Studies suggest that payment for order flow (PFOF) may not benefit investors as much as hoped, and some brokers may not be acting in the best interests of their clients. I believe that transparency and fairness are crucial to maintaining trust in the securities industry, and I urge the SEC to investigate these concerns and ensure that brokers act in the best interests of their clients. Here are some bullet points of what I am describing. As a household investor, I am concerned to learn that Robinhood's payment for order flow (PFOF) model may not be benefiting me as much as I had hoped. Despite PFOF being responsible for around 70% of its revenue, a recent study found that Robinhood does not provide statistically significant price improvement relative to exchanges. As an investor, I want to ensure that I am getting the best possible price for my trades. It is troubling to learn that retail investors who do not deal with PFOF may be getting a better price than those who do, which violates FINRA's Best Execution guidance. As a household investor, I believe that transparency and fairness are crucial in the investment industry. I urge the SEC to investigate this issue and hold firms accountable for their order-routing practices. I am glad to hear that FINRA is evaluating the impact of not charging commissions on member firms' order-routing practices and decisions. As a household investor, I am concerned about potential conflicts of interest and want to ensure that my orders are being handled in a fair and transparent manner. I urge the SEC to make the findings of this evaluation public so that investors like myself can make informed decisions. It is concerning to learn that TD Ameritrade's order routing decisions may not be motivated by competition, despite what they state on their website. As a household investor, I expect my broker to act in my best interests and seek out the best possible execution for my trades. It is alarming to learn that TD Ameritrade pays to get the first look at orders and routes them to firms that net themselves billions of dollars in the process. I believe that dark pools (Alternative Trading Systems) should provide quotes and trades to consolidate market data to bring more transparency to dark markets. As a household investor, I want to be able to make informed decisions about where to place my trades, and transparency is key to achieving that. By providing more information about trades happening in dark pools, investors like myself can better understand the market and make more informed decisions. Finally, I urge the Commission to 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. As a household investor, I want to be sure that my orders are being handled fairly and transparently and that my broker is acting in my best interests. By addressing this issue, the SEC can help to ensure that the market is fair for all investors. Thank you for your time.