Jan. 8, 2022
I am a retail investor. It is of the utmost importance in restoring a free and fair market for market participants, such as myself, to have access to information regarding loaned shares. According to brokers, Loaned shares cannot be lent without my consent if I am a beneficial owner of the shares, however, there is no transparent method to ensure that is the case and those loans have the effect of diluting the value of my investments, devaluing my role as a voter regarding shareholder rights, and, at large, damaging the pathways to success of companies (both innovative up-and-coming and established retailers) that I, and others, value. Without regulatory transparency of loaned shares, it is nigh impossible to gauge the risk on my investments and therefore impossible for companies to trust their market valuation. This is not a fair market, it is a market where rules are not and/or cannot be enforced and there is no accountability for malfeasance. America and the world still has not forgotten about Overstock.com and the regulatory protection offered to short-sellers at the expense of companies trying to run a successful business. We have been paying close attention. Laaned shares should also be unable to close a failure-to-deliver borrowers must purchase the shares before lending for short positions. Additionally, borrowing must have a finite due date when the shares must be returned and loaned shares for short positions cannot be repackaged. Serial criminality for those in violation of these new rules should have fines levied in excess of 125% of the value of the shares at the due date. Without draconian punishment, criminality will continue to be a profitable business model to naked short stocks and willing to risk a comparative small fine for immense profits, aka "the cost of doing business", while simultaneously draining the credibility of the regulatory body and capital markets. Likewise, the monopoly that the DTC maintains on loaned share information that is valuable to the regulatory process needs to be reigned in, as well as held to criminal liability for its members if the US wants to maintain the soft-glove approach of self-regulation. In addition, the SEC/CFTC's inability to track all shares is mindblowing. I am work in education by trade and we are able to track literally every single piece of data imaginable to help our students. The US stock market is filled with tens of trillions of dollars, yet the regulatory body seems to either have no clue what is going on, or so are internally fragmented that it is all by design. I am writing out of cautious optimism that it is not a broken system by design and would like value and wealth to flourish across different economic sectors and its participants, as opposed to being parasitically sapped away by financial institutions.