Jun. 04, 2022
First I must say that I am deeply disappointed at the number of comments this topic has drawn. As compared to the similar proposed rule that FINRA posted last year, the comments here are a scant fraction, and I am certain that interest has not waned. I am sure that the SEC has not changed anything in communicating potential rule changes, however, that is the problem. The retail investor community, which this is directly targeted at, requires a wider distribution effort to drive the inclusion that should be a priority of the Commission. My tardy submission is evidence of that failure. Moving on... Short selling has become and epidemic in 2022. The number of securities that have 100% utilization of all available shares to be shorted is shocking. More so when you realized that that threshold has been exhausted for over 13 weeks on average. I believe that there is a valid place in the market for short selling, however currently there is abuse that goes far beyond that. How do I know, oh, actually I don't, because there is no way for me to actually know. The only data available is typically four weeks outdated, and only for a fee. What I can determine in the countless hours that I am burdened with in trying to decipher the never ending stream of distorted information from FINRA, the media hands of the wall street insiders, and everywhere else I can scrap info from, is that our financial markets are under attack, and the broker-dealers, market makers, clearing houses and regulators all seem to be complicit with it, as long as they get their cut. The only reasonable claim I have found against the update to rule 13F and added code is the BURDEN that institutions will bear in having to comply. I have three points to that. 1. The burden is theirs to choose. They may choose to have a burden of zero by not short selling. From there it is their business decision to identify if the cost of the burden is beyond their expected profit of short selling. 2. If any institution that qualifies as being required to add this reporting to their workflow cannot figure out how to implement it for pennies a day, then they are doing a very poor job of being a fiduciary for their clients and their licenses should be revoked. Or they are being deceitful, which is more likely, and their licenses should be revoked. Further, once implemented, the reporting would be far more efficient and cost effective if it was reported on daily. As such, these changes should not be a monthly report, but a daily report. The fact that monthly is even on the table leads one to believe that this time frame was lobbied for by the very institutions that don't want this anyway. Additionally. has there ever been a regulatory requirement that was not claimed that it would become an immense burden if implemented, that then was not streamlined near immediately? 3. Preferably in addition to these changes the SEC should impose a regulatory fee of $0.01/share, one penny per share, on anyone selling shares that triggers a failure to deliver notice. If a seller legally posses the shares to be sold, there is no problem and no fee. The proceeds of this fee could be used as a charitable fund that would be publicly distributed to any institution that doesn't have the competence to implement the reporting required by these changes. -------- Lastly I'd like to illustrate a related situation that I believe warrants the Commission's attention. Company A IPOs and issues all 100,000 authorized shares to be publicly traded. Various institutions, funds and independent investors purchase up these with great vigor. Investor I has their 1000 shares in their account with their broker B. Institution H Borrows 1000 shares from the Broker B and offers them for sale. Investor I receives a windfall of cash and sees that there are another 1000 shares available for less than he bought his first 1000 shares for and buys them to bring his total to 2000 shares. CEO of Company A send notice to broker B that he has another 1000 shares than can be sold. Still with money left from his windfall, investor I buys those as well for a total of 3000 of the 102,000 shares in the float. CEO of Company A is investigated, tried, and sent to jail, (HAHA, just kidding, he's only fined,) for issuing unauthorized shares. Both the CEO and the short seller did the same thing diluting shareholder value. One was a crime, the other is frowned upon, kinda, but not really, it's just reported on for no reason what so ever since nothing ever comes of it. Please implement the 13f-2 rule change and code update ASAP, you're our only hope. Thank you for your time, and I apologize for my tardy response as I was managing the death of my soulmate.