Oct. 08, 2022
Dear SEC: Thank-you for the opportunity to comment. Economists tell us that short selling is a critical piece of market information that should be available to participants to glean the full opinion of the market on a security. If that is true then that information on short sales should be readily available. I should be able to buy a service that synthesizes that information so I can make an informed decision. The consequences for participants who do not meet the rules should be catastrophic to their ability to participate in the future. To be blunt, if they cannot fulfill the data requirements accurately and to the deadlines then they should be banned from short selling until they can. Repeated ‘data errors’ should be interpreted as intentional and short bans should be imposed of increasing duration. Of course this will not solve all the problems. Off-shore counterparties in swap arrangements, synthetic shorts and other derivatives can create the same idiosyncratic, connected, black swan risk we are seeing today. After this rule is implemented you must require participants to report global net positions on securities. The faith in American Institutions is being rocked. Implementing this will help. Daryll Fogal. P.S. - Losing our last comments is a very, very suspect thing to happen. Perhaps it’s a simple error but I hope you are investigating the IT department with external reviews.