Oct. 29, 2022
Hello Ms. Countryman, I support improved transparency that is necessary both for efficient regulation and for investors who benefit from accurate data reporting when making decisions about their investments. Transparency is foundational to an efficient and free market in much the same way that obfuscation is foundational in a game of poker. We are at an interesting point in financial history. Deregulatory ideology has been dominant for decades and has fostered the rise of complex derivative products. The derivative market has grown larger and more powerful with algorithmic trading, culminating in what amounts to a derivative-based shadow banking system that runs alongside the lit market. This framework developed in a time when the central banks' ZIRP has effectively corralled retail investors away from traditional banking products like savings and CD's and into securities markets as the primary vehicle to protect liquid value against rising costs of living. As retail investors began to navigate the securities markets I think many became frustrated with how opaque it is. There is no shortage of attention grabbing media urging people to buy and sell specific names. But when searching for reliable data little is as it seems. Price and volume can be distorted by derivatives and algo trading. Large positions can be hidden using derivatives. Shorts can be marked as longs. Twelve figures worth of blue chip market cap can evaporate in an instant like we witnessed this week with Amazon and Meta. Ideally I would like to see a maximally transparent marketplace. Positions should be accurately reported, swaps and other derivatives should not be permitted to hide positions off the books. Market makers do not need broad Reg SHO exemptions nowadays when almost all trading is done digitally and instantly. Liquidity should arise naturally through price discovery, it shouldn't be injected into the market as a matter of course. There is a lot of work to be done before I will personally feel confident that I adequately understand the value and risk of securities offered in US markets. This rule is a small step in the right direction. Sincerely, Lee Cunningham Physician, rural emergency medicine