Oct. 31, 2022
October 31, 2022
I have read numerous reports of short selling being used by powerful market participants to run companies into the ground. Enough is enough, we need more transparency in reporting short positions so we can openly see if it is used as an instrument to harm companies. Just like the Proposed Rule 10c-1 requires intraday reporting of lending, proposed Rule 13f-2 can and should require daily reporting of short selling ETFs must be included in the proposal so that they can't be used to circumvent regulations for reporting since synthetic shorting via ETFs is a very common practice.
During the 2008 financial crisis, the SEC temporarily banned short sales on 797 securities and yet, this ban did not include ETFs because of which, many market participants legally short sold ETFs, thereby circumventing the SEC's order Short selling with ETFs is very common in hard to borrow securities. In order to avoid these system wide risks generated from shorting using ETFs, they must be included in the proposed rule.
I see no reason why any fair organization dealing with legal and ethical practices should have any problem with reporting securities lending activity every 15 mins, this is a welcome proposition and should be coded into the rule, I also urge the Commission to add daily transaction by transaction reporting of short positions to the rule. I truly believe that this will help victimized companies fight back against fraudulent market participants.