Mar. 31, 2023
Dear Securities and Exchange Commission, I am writing to express my deep concern regarding the state of competition in the American markets. I believe that fair competition is essential for the health of the market and the protection of individual investors and institutions, such as pension funds. I support the new rule that orders must go to a public auction where everyone, including pension funds, has an equal opportunity to fill the order, rather than allowing Citadel to be the first to receive orders. Additionally, I strongly believe that Payment for Order Flow (PFOF) should be effectively banned in US markets, as it has been in the UK, due to conflict-of-interest concerns. It has been shown that brokers who do not accept any kind of PFOF route orders differently and consequently see superior execution quality. Furthermore, a recent study found that Robinhood does not provide statistically significant price improvement relative to exchanges, despite PFOF being responsible for around 70% of its revenue. Retail investors not dealing with PFOF get a better price than those dealing with it, violating FINRA's Best Execution guidance. I believe that FINRA's evaluation of the impact of not charging commissions on member firms' order-routing practices and decisions should be made public. Additionally, 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. I think that 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. 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. I strongly believe that the Commission should 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. The SEC should investigate conflicts of interest among market participants to ensure that participants can objectively review the rules. Enforcement of SEC rules needs to be improved with higher fines to serve as a significant deterrent for breaking the law. In some cases, broker-dealers should lose their licenses instead of receiving fines that amount to a cost of doing business. Thank you for your consideration. I hope that the Commission will take action to ensure fair competition and protect individual investors and institutions.