Dear Ms. Mitchell,
I am an individual investor writing in response to Regulatory Notice 26-15 and FINRA's request for comment on modernizing its best execution guidance under Rule 5310. The Notice raises three specific questions: whether order-by-order review of internalized orders should remain required; whether a firm's own order router may satisfy the obligation to review that router; and whether documented procedures should qualify for safe harbors. Order-by-order review is the only standard under which the price I actually receive is the price under scrutiny. Weakening it would eliminate the last point at which this rule has any direct bearing on my money.
I urge FINRA to move in the opposite direction — strengthening its best execution standard and its enforcement of it, while curtailing the influence of conflicted firms. Specifically, FINRA should:
1. **Require order-by-order review for all non-institutional orders**, replacing aggregate review for retail order flow.
2. **Establish an objective price improvement floor for conflicted retail executions** — midpoint or better at a one-tick spread, and a full tick where the spread is wider.
3. **Report execution quality by routing broker**, not solely in aggregate.
4. **Review routing inputs, not only outputs**, since a firm can engineer the very outcomes it is then permitted to review.
5. **Bar reliance under Rule 5310(e)(9)(C) on the review of any firm that pays for the order flow or executes it as principal.**
6. **State plainly that blanket "not held" designations for retail orders violate Rule 5310.**
7. **Grant periodic examiner access to the routing audit trail** and require annual publication of Rule 5310 examination findings and restitution figures.
8. **Adopt a standardized examination module** for best execution reviews.
9. **Bring an enforcement action on the theory advanced in Regulatory Notice 21-23**, which has gone unused since 2021.
10. **Publish quarterly peer benchmarking results** and refer persistent outliers to Enforcement.
11. **Remove conflicted firms and firms subject to active enforcement actions from the FINRA Board of Governors.**
12. **Designate a named individual accountable for oversight of best execution and customer order routing.**
This is a particularly consequential moment for retail investors. The SEC has proposed rescinding Rule 611, the Order Protection Rule, on the premise that a broker's best execution duty will adequately substitute for what is lost. If Rule 5310, as enforced by FINRA, is to be the sole protection standing between retail investors and inferior prices, FINRA should state clearly and specifically what it will do differently from what it has done over the past ten years.
Thank you for considering this comment., the Order Protection Rule, on the premise that a broker's best execution duty will adequately substitute for what is lost. If Rule 5310, as enforced by FINRA, is to be the sole protection standing between retail investors and inferior prices, FINRA should state clearly and specifically
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Jason Troxell Comment On Regulatory Notice 26-15
Dear Ms. Mitchell, I am an individual investor writing in response to Regulatory Notice 26-15 and FINRA's request for comment on modernizing its best execution guidance under Rule 5310. The Notice raises three specific questions: whether order-by-order review of internalized orders should remain required; whether a firm's own order router may satisfy the obligation to review that router; and whether documented procedures should qualify for safe harbors. Order-by-order review is the only standard under which the price I actually receive is the price under scrutiny. Weakening it would eliminate the last point at which this rule has any direct bearing on my money. I urge FINRA to move in the opposite direction — strengthening its best execution standard and its enforcement of it, while curtailing the influence of conflicted firms. Specifically, FINRA should: 1. **Require order-by-order review for all non-institutional orders**, replacing aggregate review for retail order flow. 2. **Establish an objective price improvement floor for conflicted retail executions** — midpoint or better at a one-tick spread, and a full tick where the spread is wider. 3. **Report execution quality by routing broker**, not solely in aggregate. 4. **Review routing inputs, not only outputs**, since a firm can engineer the very outcomes it is then permitted to review. 5. **Bar reliance under Rule 5310(e)(9)(C) on the review of any firm that pays for the order flow or executes it as principal.** 6. **State plainly that blanket "not held" designations for retail orders violate Rule 5310.** 7. **Grant periodic examiner access to the routing audit trail** and require annual publication of Rule 5310 examination findings and restitution figures. 8. **Adopt a standardized examination module** for best execution reviews. 9. **Bring an enforcement action on the theory advanced in Regulatory Notice 21-23**, which has gone unused since 2021. 10. **Publish quarterly peer benchmarking results** and refer persistent outliers to Enforcement. 11. **Remove conflicted firms and firms subject to active enforcement actions from the FINRA Board of Governors.** 12. **Designate a named individual accountable for oversight of best execution and customer order routing.** This is a particularly consequential moment for retail investors. The SEC has proposed rescinding Rule 611, the Order Protection Rule, on the premise that a broker's best execution duty will adequately substitute for what is lost. If Rule 5310, as enforced by FINRA, is to be the sole protection standing between retail investors and inferior prices, FINRA should state clearly and specifically what it will do differently from what it has done over the past ten years. Thank you for considering this comment., the Order Protection Rule, on the premise that a broker's best execution duty will adequately substitute for what is lost. If Rule 5310, as enforced by FINRA, is to be the sole protection standing between retail investors and inferior prices, FINRA should state clearly and specifically