April 20, 2022
File No: S7-14-22
This rule appears to circumvent the hazards of a free market. It is not intended to mitigate risk but to absolve all market participants from hazardous short-selling. This will lead to FICC and pension managers to engage in extremely risky behavior with no consequences for their actions thereby eliminating the free and fair market.
Short-sellers have no set or limited novation period which will enhance an already predatory short-selling environment. It would behoove the Agency to limit novation to three days or less prior to liquidating (and removing) an Agent Clearing Member, Sponsoring/Sponsored Member in order to prevent extended poor risk management practices. An extensive and public disclosure of reasons why a Member is engaging in short-selling a company should also be required as a way to establish sound risk management techniques. This will aid in preventing short-selling as a takeover strategy in collusion with a proxy.
Lastly, membership should be limited only to those institutions/market participants with absolutely zero SEC infractions, either convicted or settled. This will help establish a new market participant culture with extremely high standards and ethics congruent with American greatness and set a global standard for market professionalism.