You must have a return. Yours is good. What Jdc1, myself and a few others have done is, not use the regulator in the Sniper, cap it off and install a remote regulator. Then a return line is run from the remote regulator back to the tank. In Jdc1’s pic, the return comes off the bottom of the regulator.
Your pump puts out way over 60 psi. The regulator holds back 60 psi and the excess gets released which must be plumbed back to the tank.
Usually the cycle is like this, Tank>pump>fuel injector/rail>regulator>tank. You CAN'T have a regulator BEFORE the fuel injectors because the return line is open to tank pressure (Patm + Pvapor) and you would have no (some but insufficient, use Bernoulli) liquid fuel pressure. This is all very simple stuff and should be available in the Holley manual. If you don't approach this systematically you will/and seem to have already driven yourself nuts. Use quality parts, dot your I's and cross your T's and you will be in business.
I'm trying to reconcile these two posts. What is the benefit of using a remote regulator vs. just connecting the return from the Sniper to the stock return line to the tank?
Also, if I do use a remote regulator and inline pump, isn't the regulator installed between the pump and the Sniper? If so, I don't understand @Braden620's post.