Oct. 16, 2000
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549-0609
Comment to Release No. 43084; File No. S7-16-00; Disclosure of Order Routing and Execution Practices; Via E-mail.
Dear Mr. Katz:
Thank you for taking comment on Release No. 43084. I submit these comments as a private investor who has no vested interest in any kind of trading system.
With due respect, this one of the most ridiculous proposals ever put out by your agency. To be blunt, it is a complete shirking by the Commission of its statutory duties to facilitate a National Market System.
After taking comment on the huge market structure comment release, provoking much public debate, after all the tough talk by Commission leaders, after seeing the scandals in all the major markets unfold, we get the wimpiest (yet most burdensome) response imaginable--Release No. 43084.
Surely, this cannot be the Commission's response to market reform.
As noted in other commentators' letters (see September 6, 2000 letter by Jay W. Peake; Sept. 25 letter from Morgan Stanley Dean Witter), and in past letters sent by this commentator, until the Commission addresses the issue of marketwide time priority in continuous markets, no competitive market will exist. There will be no incentive to improve the quote. I agree with MSDW's comment regarding price improvement being a "holy grail" for the Commission. Get over this quaint idea espoused by the NYSE and perhaps others. All orders must be exposed, and intermarket linkages must preserve time and price priority. No excuses. Investors should not have to "go fish" for a better price--the best price is in the market right now--let us access it!
The public wants reform. Congress wants reform. Even a majority of Wall Street wants some type of reform. Yet the Commission appears unwilling to fix the Rube Goldberg ITS system we now have, an antiquated idea whose only purpose was to (successfully) stymie the requirements of the '75 Act Amendments--a National Market System.
Ladies and Gentlemen of the Commission, we know you all have the courage to proposal a dismantling of major accounting/consulting firms. You have the courage (?) to propose this release and its impossibly intricate record-keeping system. I know in your hearts you want to protect investors at all costs. But this is not the way.
I do not wish to waste time with another lengthy comment letter, so let me piggyback on MSDW's proposition that market linkages are a "public good" necessary for the effective functioning of a National Market System. Established market players will attempt to maintain their fragmented, cartel-like franchises--and lobby you like crazy to retain the status quo--but price-time priority must be mandated. This is the path for the SEC, the "Investors Advocate," to take.
Huntington Beach, CA