Kaufman Letter To SEC

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This letter just hit the SEC’s website today. Please take the time to read it.
Starting on Page 4, we find Possible Market Structure Solutions:
1. Finalize pending rule proposals (Flash?)
2. Bring HFT into Regulatory Regime.
3. Allocate system costs based on MESSAGE TRAFFIC.
4. Standardize dissemination of market data (we understand this one well at Themis Trading).
5. Raise the bar for becoming a market center, and equalize rules between ATS’s and Exchanges.
6. Think about making markets deeper, and not just focus on the NBBO.
7. Examine incentives that distort pricing (ie maker taker pricing).
8. Examine whether too much flow is trading dark.
9. Consider releasing the ban on locked and crossed markets.
We believe many of these to have substantial merit, including items 1, 2, 3, 4, 5, and 7.