December 16, 2021
I appreciate the SEC giving me, a retail investor, the opportunity to comment on the proposed rule.
The market seems to be, by design, as convoluted as possible to anyone: not directly building trading systems such as latency arbitrage, ATS etc. Anyone who does not work for a Financial investment firm or for one of the many SRO (FINRA, DTC, CTFC). It also seems, again by design, that the rules are convoluted as to aid them in essentially robbing everyday investors. All under the guise of creating liquidity, best price discovery, no fee trading etc.
Today, speaker of the United States House of Representative said that \" we are a free market economy...\" Well it sure does not feel that way. Retail traders are subject to brokers removing their ability to sell securities, buy securities. Retail traders are subject to broker who lend their cash account shares out to short sellers who then use those same shares to short the stock, thus negatively affecting retailers investments. Retail traders are subject to SRO who do not enforce the market on retail behalf but on the behalf of their members who they later go to work for. The SEC is the only link between the private market of investing and a mere of hope of sound regulation that will put bad actors in check.
Retail traders are well in need of firm regulations to improve their morale in respect to the US trading markets. The SEC should impose reforms such as:
- Releasing name of WHO is borrowing and lending shares. a change from only releasing the company name of which the shares are borrowed and lended from.
- Explicitly notify retail traders when their shares are being lent out and to whom.
- Share all revenue gained from lent Retail shares.
- Eliminate Onward lending
- Have an imposed due date for every loaned share.
Finally, it seems likely that Proposed Rule will increase cost and reporting burden of borrowing stock for any reason (cover short sales, close fail-to-deliver, access voting rights, etc.). Unintended consequence may be to tilt brokers cost/benefit analysis in favor of fails.