September 21, 2020
To Whom it May Concern,
I am writing to express my opposition to the proposed rule change.
The benefits of increased transparency are well documented and greatly outweigh the reporting costs. We should be moving in the opposite direction - we should be increasing transparency, not attempting to hide ownership.
I am concerned not only with the ability of activists to "hide" their ownership while building stakes - rather, I believe the biggest danger is the ability of undesirable actors to hide stakes in firms and thus engage in nefarious activities.
The proposed rule harms investors (especially individuals and small institutions who tend to hold small stakes), firms (who will have to pay a higher cost of capital due to the lower level of transparency and higher risk), and society at large (by favoring criminal actors). It is frankly puzzling that this would even be contemplated, given the overwhelming consensus on the benefits of transparency.
Regards,
Veljko Fotak, Ph.D.
Associate Professor of Finance, University at Buffalo, SUNY
Fellow, Sovereign Investment Lab, Baffi CAREFIN