March 15, 2022
I thank you for this opportunity to offer comments and suggestions in regards to the proposed rule under file no. S7-08-22: Short Position and Short Activity Reporting by Institutional Investment Managers.
Q5: Reporting Thresholds
Managers avoid triggering the proposed Reporting Thresholds.
Why would anyone have absolute confidence that the information reported by Managers would be undoubtedly accurate? Given that the information required is self-reported, those who don't want to unveil their short-selling strategy will find any way to NOT disclose that information accurately.
Even if in the event that Managers engage in \"bona fide\" behavior and provide information that triggers the Reporting Thresholds, what would restrict them to NOT accurately report past the threshold?
Let us be reminded by the evidence of this fact can be found in endless settlement cases in FINRA whereby the offenders failed to disclose information accurately, miscalculated their positions and never reported it, or mismarked positions intentionally.
Therefore, I highly urge the Commission to reconsider their position of: \"At this time, the Commission does not intend to verify the accuracy of the data reported by Managers, but may consider doing so in the future after assessing whether such verification would be useful or necessary to enhance the integrity of the data.\"
How is it that false statements or omissions on tax returns, either knowingly or under circumstances of gross negligence, reported by corporations or individuals incur penalties, and possible jail time, but not for Managers? Relying on \"bona fide\" behaviors and proposing rules that do not address this behavioral \"exemption\" for Managers that do not report information accurately. Where have we seen this before?
The integrity of data IS NECESSARY, this is a matter of TRUST. This affects everyone in the market, it cannot be considered fair when it lacks integrity of data.
How could a spacecraft reach outer space and execute on its goals if data or issues are not reported accurately or at all, to those working on the components and systems that will ensure the success of a mission? It requires the cooperation of everyone to reach a fair market.
It is imperative to establish the necessary steps to ensure the accuracy of the data being self-reported by Managers.
I recognize the Commission statement \"that CAT was not designed to track such positions\" and that there are limitations. However, this does not absolve the Commission of its responsibility and provide a solution to ensure the integrity of data in EVERY aspect of the market.
Overall, I support the proposed rule and more transparency.