Jun. 28, 2023
Dear SEC, I am writing to provide my feedback on the proposed rule amendments in S7-06-22 "Modernization of Beneficial Ownership Reporting." As a retail investor, I appreciate the opportunity to voice my concerns and opinions regarding these important matters. Firstly, I would like to request an extension of the comment period for this rule proposal. Given the complexity of the proposed amendments and their potential impact on retail investors, additional time for public review and analysis would ensure a more inclusive and comprehensive feedback process. While I support the proposed amendments to revise filing deadlines, which would facilitate timely disclosures and reduce information asymmetries, I have significant reservations about the proposed amendments to Rule 13d-3. Specifically, I strongly oppose the proposal to deem holders of cash-settled derivative securities as beneficial owners of the reference securities. Granting such status to derivatives holders, who may lack direct ownership or voting rights, raises concerns about undue influence and control over issuers. The potential for derivatives holders to manipulate voting outcomes undermines the principles of fair and transparent corporate governance. Moreover, the proposed amendment to exclude short positions when determining the number of equity securities deemed beneficially owned by holders of cash-settled derivative securities is deeply problematic. This exclusion creates an imbalance and disadvantages retail investors. Netting long and short positions should be considered to ensure a fair and accurate determination of beneficial ownership, rather than allowing sophisticated market participants to exploit this loophole. Instead of conferring beneficial ownership status to derivatives holders, I propose separate reporting requirements for significant derivatives positions, both long and short. This approach would enhance transparency and enable market participants to make informed decisions while avoiding the unintended consequences of granting ownership rights to derivatives holders. In conclusion, I urge the SEC to carefully consider the concerns raised by retail investors like myself. It is crucial to strike a balance between facilitating transparency and protecting the integrity of the market. I appreciate your attention to these matters and trust that you will make the best decisions for the benefit of all market participants. Thank you for your time and consideration. Sincerely, AM