Subject: S7-18-21
From: Kris Williams
Affiliation:

Dec. 27, 2021

 

Real reform for securities lending must include: 
(1) Notifying public about who is borrowing & lending shares (not just which company’s 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”) 


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 broker’s cost/benefit analysis in favor of fails.