February 14, 2022
I appreciate the work the SEC is doing to improve transparency in the US stock markets. An adjustment of regulatory language, authority and breadth to the digital age is long overdue, and rules that are based on the arguments for a paper-based economy have to be abandoned.
Here my main points that real reform for securities lending must include:
(1) Notifying public about who is borrowing lending shares (not just which companys shares are borrowed or lent),
(2) Notifying retail investors that their shares are being lent, (because (a) they don't get to vote (b) they don't get tax-qualified dividends),
(3) Sharing any revenue earned from lending their shares with retail investors,
(4) Eliminate Onward Lending completely (public companies transfer agents have opposed this for decades),
(5) Require every loan to have a due date (not if applicable).