Oct. 14, 2022
The current state of transparency, accountability and adherence to the rule of law within the short-selling regime is a disgrace. Compliance desks at broker-dealers, market makers and other institutions across the globe are making a mockery of the US financial system, companies ability raise capital and for retail investors to confidently invest in equities. The REG SHO naked short market maker exemption should be repealed entirely, there is no evidence to suggest the market makers are adhering to law when applying it, quite the contrary. Although I support any legislation that shines light on this very opaque industry, I don’t think it goes far enough. It’s Not strict enough, Options plays should never be allowed to be used to reset close-out obligations or as evidence of a borrow to short—Options are not shares. You all know from the recent cases of Reg Sho abuse that naked shorting and close out- obligation fraud is rife and creating a potentially explosive risk to the entire financial market. You continually state that short-selling plays an important role in the market, but how can that ever be considered true when it’s plagued with corruption, abuse and fraud. Blockchain should be considered to monitor short-selling if it’s not banned; mismarking longs& short-exempt should carry criminal penalties. In conclusion I support this proposal as a good first step in ridding short-selling of fraud & mitigating unnecessary risk to the entire financial system. Kindly Bryan