Aug. 16, 2022
August 16, 2022
Transparency in the markets is inherently beneficial to all involved. For this reason, I support transaction-by-transaction reporting as it will increase the transparency and eliminate the ability to hide positions within aggregate reporting.
Similarly, I support the 15-minute reporting requirement. Timeliness is valuable in maintaining transparent records. This reporting may increase costs, but will provide great value in preventing fraud and closing \"loopholes\" that can be more easily exploited with long reporting times.
Transparency in reporting benefits buyers, sellers, and issuers of securities. Issuers in particular are often the victims of underreporting in short sales, as their business is driven to bankruptcy. Proper reporting will allow them to respond effectively to predatory short positions and revive the company.
As a retail investor, my investment viability depends on accurate public knowledge of the markets. If I am to make an informed decision on the purchase or sale of a security, I need to assess the risks involved that are associated with outstanding short positions.
In the same vein, public awareness of these positions will also benefit the SEC itself. By allowing the public to monitor short selling data and report securities fraud, the SEC improves its own ability to fulfill its responsibility to protect the markets without incurring any additional cost to itself.
Finally, I note the importance of this improved reporting to the nation and economy as a whole. As has been seen in previous economic crises, irresponsible practice in the markets can have long-lasting destructive effects on the economy both on a national and a global scale. Specific to lending practices is the risk of \"chains\" of obligation. These chains amplify risk and extend it through the market. Timely, accurate reporting will truncate these chains and reduce the economic fragility inherent in excessive security lending.
In conclusion, the proposal includes measures that will be beneficial both to individual investors and the markets as a whole. I support the increase in detail and timeliness of reporting that will be required.