August 12, 2006
Why is not EVERY share of stock in EVERY corporation simply assigned a unique number?
Make it mandatory that every shareholder be allowed to know, at any time, exactly which shares he/she holds, without issuing certificates.
Of course the same transparency must likewise apply to those who lend shares for shorting or for those who have margin accounts, whose shares are being loaned by their brokers.
The data almost certainly already exists. Shares can probably be traced all the way back to the original purchaser and all buys/sells/loans in between.
This same transparency could and should apply to ALL manner of trading. And furthermore, EVERY corporation should have the RIGHT, at all times, to know EXACTLY who owns each and every one of their shares, whether they are long or short, so that EVERY corp. would be able to account for every share and its movement, at all times.
In other words, let's say that I have a margin acct. with 10K shares. I should be able to know the exact nos. assigned to every one of those 10K shares. If half my shares are being loaned, I should have the right to know which nos. are in my acct and which are on loan at any time.
And if I don't have the right to know exactly to whom my shares are being loaned (which I probably wouldn't), at least the company itself should have access to that specific information as they deserve to be able to account for EVERY one of their shares at ALL times.
It is absolutely ABSURD that any publicly traded Co. should NOT be entitled to know exactly in WHOSE hands EACH and EVERY one of its shares are at all times and be able to track their movements.
If all this numerical share information were available to every investor and every corporation, I can't help but believe that the whole Naked Short Sales problem would disappear, almost overnight, as everything would be made very transparent.