American Consumer & Investor Institute Executive Director Barbara Comstock Blasts SEC Rules that Will Raise Costs, Reduce Market Access for American Investors

WASHINGTON, June 12, 2023 /PRNewswire/ -- Barbara Comstock, Executive Director of the American Consumer & Investor Institute, released the following statement after filing comments opposing proposed U.S. Securities and Exchange Commission rules for the stock market that would negatively impact retail investors. 

"U.S. Securities and Exchange Commission Chairman Gary Gensler is attempting to remake the U.S. stock market with a slew of new rules that will make it more difficult and costly for Americans to trade and invest," said American Consumer & Investor Institute Executive Director Barbara Comstock. "Under the current rules, retail investors have greater access to the stock market at lower cost and with fewer constraints than ever before. They have allowed millions of Americans, including younger, more racially and gender diverse investors, to participate in markets and reap the benefits they provide. Chairman Gensler's misguided experiment would upend years of progress toward expanding investment opportunities, especially for underserved communities. It has been widely criticized, including by industry experts and Members of Congress on both sides of the aisle. The SEC should immediately halt this effort before it jeopardizes the ability of Americans to build a better future for themselves and their families."

Comstock's comments address four proposed SEC rules: Regulation Best Execution, Order Competition Rule, Regulation NMS, and Disclosure of Order Execution Information. Read the full letter here.

Key Excerpts: 

• Unknown Costs: "Numerous academic research studies, as well as research conducted by market experts like SIFMA, demonstrate that given the cumulative effects of the SEC's proposals the purported benefits are likely overstated while the costs are understated."
  
  
• Rolling Back Progress: "As of late 2021, retail investors' share of total equities trading volume approached 25%, up from 20% in 2020 and 10-15% the preceding decade. Much of this growth has been facilitated through the rise of low or no-cost broker-dealers that provide both broad market access and high-quality execution."
  
  
• A Solution in Search of a Problem: "There is no evidence that market quality is currently problematic for retail investors or that the SEC's new, unproved government trading mandates – which would require significant additional infrastructure and costs to implement – will improve pricing or execution quality."
  
  
• Unintended Consequences: "Importantly, by its own admission, the Commission acknowledges in its proposal that it 'does not have…data that may inform the Commission on certain economic effects' and it 'is unable to quantify certain economic effects.' Even this administration's own Department of Justice has cautioned of unintended consequences." 
  
  
• Less Access for Underserved Communities: "We share the concern voiced succinctly by the National Association of Securities Professionals that 'the SEC's proposals could result in a lack of access to the stock market for underserved demographics which could negatively impact the ability of these individuals and communities to build wealth and, in turn, further widen the existing diversity gap in investing.'"

SOURCE American Consumer & Investor Institute