Oct. 26, 2022
October 26, 2022 I believe that any further transparency regarding short positions, especially large ones, is not only needed but required for investors to have confidence in our markets. Market makers' exemption to the rules regarding location of shares to borrow, along with no one really knowing if their shares are being lent or not, does nothing but diminish investor confidence. The commission itself has noted the ability for abuse and fraud with short selling, specifically in a \"short-and-distort\" capacity. If I am long a stock, through a broker, and that same broker lends out shares for short positions without my consent and without me receiving any substantial benefit from the loan, then not only does that undermine my faith, but it essentially allows those with a short position to use my shares as a bet against my long position. If that is happening to any investor, he/she deserves to have information provided to them to ensure they can make an informed investing decision. The SEC's man date is to ensure fairness of markets for all investors, not just large institutions and Hedge Funds. I believe this rule is a good step in following that mandate. After all, securities lending is not investing in any capacity, shy of the returns it brings on the lending fees, which themselves have very little or nothing to do with the underlying stock being lent.