Subject: S7-08-22 Comment for Short Position and Short Activity Reporting by Institutional Investment Managers
From: Sami Testarossa
Affiliation:

Mar. 11, 2022

 


Dear SEC,
 
I am happy to see rule posting for improving the transparency of our market. With that said, I think this rule is still insufficient to completely capture the whole operation of security exchange market. See, it is securities but not just stock. In fact short position in stock is only a tiny portion of all possible vehicle that can pose bearish position. I believe that you don’t need more education from me on this topic, so here is the bottom line, we need full disclosure from all trading firms on the following:
 
1.          Short of put position.
2.          Long of put position.
3.          Short of call position.
4.          Long of call  position.
5.          Short of swap position + swap type + counter party name (for verification)
6.          Long of swap position + swap type + counter party name (for reverse verification)
 
Or, simply say, report ALL of the positions.
 
This is a very reasonable request and is entirely enforceable. Look, I could simply login to my county treasure tax collector website and inspect all history of any private property asset. This is exactly the transparency that we need. The ultimate goal should be simply allow all public personal to search up a firm in an SEC or FINRA index system, and such index should display full position (short and long) of a firm.
 
I am very sure there are much of head wing that are against of this motion. So, why is this important? And, why is this fair? There are way too many good reasons. I will speak for my own opinion, but keep in mind that this does not cover all perspective from retail in general.
 
Reason:
Naked short selling. The existing of such practice is already fucking stupid. But, let’s put our emotion aside. I am an Electrical engineer, and I will approach this in a practical perspective. The underlining of a stock is fragmentation of a company. The moment that you counterfeited a stock share, it is diluting the existence of company asset while creating collateral with no actual pursuing party. It is basically constructing a dynamic memory allocation no delete in the end. This program/market will eventually crash.
 
Now, when you disclose this full position, it will enable the underling company to assess the level of dilution and exercise their legal right.
 
In a professional practice, we need public traded company to actively get involved, so that we can have enough of man power to deal with those data. This is essentially an AS9100 practice where all reported event shall have a proper trigger of an automatic handling procedure.
 
You should regulate all public traded company to disclose their book entry in parallel, in fact, you should encourage company to disclose their book entry record to not just shareholders but all public entity. This disclosure should require company accountant to compare shareholder book entry record against this new short and long reporting data. When a mismatch occurs, CPA audit should be conducted. If the mismatch is not human error, then this public traded company shall immediately issue a recall of all shares within a time frame. Only then, you can ensure and protect the legal right of the original and real shareholder. If a company fails to perform a recall, then it lose its privilege to trade publicly, thus it should be forced to go private where the worst case is dissolving of such company to reclaim back all float. This will also automatically ensure all shares are accounted for.
 
This is getting a bit long, I will refrain from continuing to my rant on current market unfairness. In exchange, I would like to see this motion get pushed forward. This proposal is good, but it is far from enough.
 
Love you.
 
Public Name: Jason Teng
Screen Name: Sami Testarossa
Riverside County, California