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Comment by yazaddaruvala | Hacker News Reader

I'm not pro crypto exchanges, but does the SEC really live up to this guy's promises?

> SEC registration establishes critical requirements that protect investors from individual risk and protect capital markets from global systemic risk. The requirements also make U.S. markets among the safest, most robust, most vibrant and most desirable marketplaces in the world.

Does he mean the requirements that continue to allow dark pools[0]?

or the ones that allow arbitrage (theft?) through low-latency order flow[1], prior to high-latency trade execution?

[0] https://en.wikipedia.org/wiki/Dark_pool

[1] https://en.wikipedia.org/wiki/Payment_for_order_flow

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I don't think it's clear that PFOF is bad for retail investors. Many people argue (see Analysis section of the article you posted, and also Matt Levine's writing about it on Money Stuff) that PFOF is actually a net good for retail investors, getting them both price improvement and lower commissions.

Also:

> In the United States, accepting PFOF is allowed only if no other exchange is quoting a better price on the National Market System. ... Transactions must be executed at the best execution, which could mean the best price available or the speediest execution available.

Yeah... so Citadel receives the PFOF from Robinhood before my trade, then Citadel gets access to close my trade at a later millisecond.

Why is that the order it happens in? Maybe, there is no fraud... but really?

One of the most valuable things that has come out of the cryptocurrency industry, is a better understanding of just how much worse our fiat currency regulatory environment could be. It's, by all means, not all that we might wish for. It's way better than crypto.

> The requirements also make U.S. markets among the safest, most robust, most vibrant and most desirable marketplaces in the world.

...

> Does he mean the requirements that continue to allow dark pools[0]?

> or the ones that allow arbitrage (theft?) through low-latency order flow[1], prior to high-latency trade execution?

Which markets don't have those?

> In Canada, PFOF is not allowed on Canadian listed securities,[5] so Canadian brokers charge commissions,[8] however, according to the current Canadian securities regulations, brokers can accept PFOF on non-Canadian listed securities.[9] It is also banned in the United Kingdom.[5][10] According to Euronext, European authorities have regulated payment for order flow, and the practice is allowed in a number of national jurisdictions across Europe.[11]

On the wiki page for PFOF

Don't forget about SPACs that are no better than a lot of shitcoins.

I wouldn't say that this is a counterpoint to the SEC side. The SEC dislikes SPACs almost as much as crypto and has (slowly) been taking steps to limit them.

To me this reads as an off topic whataboutism. Perhaps [0] and [1] deserve their own articles, but neither detract from the overall point of what the tweet is saying and provide any demonstration as to why crypto platforms should continue breaking the law.

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