Jan. 04, 2022
Dear Commission, I am not a finance professional. However, transparency and fairness in the market, especially for retail investors, should always be pursued. I applaud the effort to require lenders to disclose certain terms of their securities lending. In respect to application, I concur with the comment made by STP Advisory Services which advised that the proposed rule should: (1) Notifying the public about who is borrowing and lending shares (not just which company's shares are being borrowed or lent). (2) Notifying retail investors with street name shares that their shares are being lent, (because (a) they don't get to vote and (b) they don't get tax-qualified dividends). SEC must adopt a more consistent interest in regulating, monitoring, and enforcing rules that require brokers to keep accurate records of ownership. (3) Sharing any revenue earned from lending shares held for retail investors with those retail investors. (4) Eliminating Onward Lending completely (public companies and transfer agents have opposed this for decades, even pointing to it as a source of phantom shares and over voting in matters of corporate governance). (5) Requiring every loan to have a due date (not just if applicable). When securities loans without due dates are tolerated, the loan may be allowed to remain unsettled indefinitely. Frankly, I believe that short selling should not be legal in the first place. Conceptually, it seems to contravene the definition of a fair market if one can borrow a share to create artificial supply and negative price action so a proper fix to this system is to simply ban the borrowing of shares.