Mar. 18, 2023
Hello SEC, As a household investor, I am writing to comment on the following proposed rule (S7-01-23): Prohibition Against Conflicts of Interest in Certain Securitizations. While I agree that firms should not be "making proprietary bets" against instruments that they "assemble, underwrite, place, or sponsor", the rule has exemptions for some of the worst actors in our current market, namely Market Makers and Hedge Funds. It's unacceptable for the SEC to create an enforcement action that exempts the most criminal elements in the system, namely abusive and exploitative Market Makers (like Citadel and Virtu) and Hedge Funds. There should be no excuse for any entity to bet against an instrument that was "assembled, underwritten, placed or sponsored" under their supervision even as a Market Maker, a hedging activity, or as a way to fulfill a liquidity requirement. If that's the case, the instrument should not have been "assembled, underwritten, placed, or sponsored" at all. My fear is that this enforcement action does not go far enough to be universally applicable to all market participants and that the exemptions will be exploited to neutralize the impact of this provision. This just appears to be another watered down, diluted, enforce action designed with loopholes for the most criminal elements in the system. Because of this, I would ask the SEC to "re-propose" this rule while removing the exemptions found in sections E, F, and G. Thank you, William Bledsoe