Jun. 26, 2023
Dear Sir/Madam, I am writing to express my appreciation for the efforts made by the Securities and Exchange Commission (SEC) to foster a more accountable financial system. Identifying major shareholders and potential conflicts of interest is paramount to maintaining market integrity, and amendments to current regulations are crucial for enhancing transparency in stock ownership and providing a clearer view of market dynamics. The adoption of structured, machine-readable data language for filing Schedules 13D and 13G promises efficient and standardized reporting, thereby facilitating enhanced oversight. Through structured data, we can better monitor and identify potential risks, triggering the necessary regulatory actions. Moreover, Rule S7-06-22, if implemented correctly, can bring much-needed transparency to hedge funds' short positions. Timely reporting of short position changes can prevent hidden accumulations and ensures that market information remains up-to-date. This transparency and these reporting requirements act as a deterrent against coordinated actions aimed at suppressing stock prices, fostering a level playing field for all market participants. However, while I endorse the push towards transparency, I am concerned about the potential dilution of voting power for actual shareholders if cash settled derivatives owners are considered beneficial shareholders. It is essential that we protect voting rights and ensure that the votes of actual shareholders carry meaningful weight. Clear guidelines are needed to avoid confusion and unintended consequences in this respect. In the spirit of fostering fair competition, I hope the SEC will address these concerns and prioritize the protection of shareholder rights in the final rule. It is important to prevent any unfair advantages for specific market participants, contributing to a more level and equitable market. Increased transparency, timely reporting, enhanced oversight, deterrence against manipulation, and a level playing field are crucial for market integrity. I implore the SEC to urgently adopt and enforce these amendments for the benefit of all investors and the market's overall health. I am hopeful that these changes will lead to a more efficient and accountable financial system. I believe in the importance of transparency without compromising fairness and look forward to seeing continued efforts to uphold these values in our financial systems. Thank you for your attention to these matters. Yours faithfully, J.D. Paced