Mar. 31, 2023
Dear SEC, I am writing to express my support for the proposed new rule that states that Citadel cannot be the first to receive orders. Instead, orders must go to a public auction where everyone, including pension funds, has an equal opportunity to fill the order. I believe this will create a more level playing field for all investors and ensure fair competition. The Payment for Order Flow (PFOF) practice has been effectively banned in the UK due to conflict-of-interest concerns. I strongly believe that this should be the case in US markets too. Brokers who do not accept any kind of PFOF route orders differently and consequently see superior execution quality. 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. FINRA is evaluating the impact of not charging commissions on member firms' order-routing practices and decisions, and the findings 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. 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 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. Some broker-dealers should lose their licenses instead of receiving fines that amount to a cost of doing business. In summary, I strongly urge the SEC to consider these points when making their decision and implement the proposed new rule to ensure a fair and transparent market that benefits all investors, not just a select few. Sincerely, A Concerned Investor