Mar. 31, 2023
Dear whomever this may find at the SEC, I am writing to you today as a household investor to comment on a recent rule proposal regarding order competition; Order Competition Rule, File No. S7-31-22, Release No.34-96495. Every rule is only as good as it is enforced. With that being said, I believe we need to see higher fines that will actually deter rule breaking, as well as actually seeing criminal prosecutions for more egregious bad actors. Another punishment I believe is fair and would personally like to see would actually be the removal of broker-dealer licenses for those who continuously break the rules, even if it is an “honest mistake”. Mistakes only happen a few times, when the same situation or mistake continuously happens it’s practice, not a mistake. I personally believe this rule needs to be accepted and implemented immediately. I fully agree that citadel (and/or any other market participant) should not and cannot be the first to receive orders from market participants, and that these order should first go to a public auction where all market participants have an equal and fair chance to fill the order. The fact that this is not already the case, undermines and contradicts the notion that U.S. markets free and fair markets. Furthermore, the U.K. Banned payment for order flow (PFOF), citing it causes a conflict of interest for many of these market participants. This too should be the case for U.S. markets, what makes it different in the U.K verse the U.S.? Household investors that are not dealing with PFOF get a better price than those whom are dealing with it. This directly violates FINRA’s best execution guidance. That right there is a red flag. FINRA is currently investigating the impacts of member firms’ order-routing practices. As a U.S. citizen and household investor I believe these findings should be made publicly available. This rule also aims to bring more transparency and fairness to dark markets which I believe is a necessity. Dark pools and other alternative exchanges currently dominate American markets. This dominance gives the participants who own and operate these exchanges an unprecedented advantage over other market participants. This is further evidence to support that our markets are not as free and fair as we like to think. Furthermore, wholesalers have been able to assert an extreme influence over other market participants. This leads to conflicts of interest that may corrode a participants ability to objectively review, interpret, and abide by the rules. These wholesalers are taking billions of dollars a year from individuals and institutions. These middlemen provide nothing in terms of bettering our markets, in fact, they act more of a leech in our markets in the way they extract capital. The removal of these middlemen would be extremely beneficial to both household and institutional investors. The public auction alone would save individuals and institutions billions of dollars. We live in a unique time in history and the commission has a unique opportunity to bring positive and meaningful reform to our markets. As an individual household investor, I fully support the commission in all efforts to bring greater transparency and fairness to American markets. I urge the commission to the pass this rule into effect as soon as possible. Sincerely, Household investor Matthew Messner Sent from my iPhone