Oct. 08, 2022
October 8, 2022 I am an individual 'retail' investor that engages in the US capital markets and write today to comment on the SEC's proposed rule S7-18-21 for Reporting of Securities Loans. I would like to note that a number of large institutions have submitted comments on this rule suggesting it is withdrawn or amended to a version more amenable to their business practices. Another obvious attempt from those who operate and profit from working in the darkness and away from transparency to maintain their highly lucrative approach of operating in the dark. Some of these institutions have even gone as far as suggesting that this would have a negative impact on retail investors like me. This is blatantly false and frankly an embarrassingly ignorant statement for any institution to make. It is beyond clear that these institutions are simply parroting such false statements to try to maintain their profit levels, rather than do what is best for working families and the market as a whole. The proposed rule in its current form would highly benefit main street investors, pension funds and the like due to the increased transparency offered. The rule would provide a better idea of the risks involved with the investment we're making, before it is made. When short selling practices occur in the dark and 'current' short sale information is provided long after a position has been entered into, retail investors and the like cannot be aware of the full range of risks that they incur when buying securities. You can understand why this lack of information would represent a problem for all investors, who are expected to invest on incomplete and dated short sale information. I strongly support the intraday 15 minute reporting requirement. The cost and effort involved with this is justified in order to help in early identification of abusive shorting practices, thereby reducing the ability of toxic market participants to hide behind loopholes in an attempt to prevent such fraudulent practices from occuring in our capital markets. The new rule would also provide any victimised companies a greater ability to defend themselves against predatory short selling. Short selling in the dark harms true competition and price discovery. The enactment of this rule would also introduce the ability for the general public as well as public companies to serve as watchdogs for the SEC as an initial line of defense against abusive practices by being able to more granularly monitor short selling of securities and detecting fraud as it pertains to those securities they are invested in. This ultimately helps and strengthens the SEC's ability to fulfil it's mandate and to weed out market participants that are working against SEC rules, all at no additional cost to the SEC. I would reiterate that I am a strong supporter of transaction by transaction reporting. It is clear that aggregated reporting is not transparent and provides far too much concealment of any fraud that can be hidden in aggregates. Why should one individual or entity have to suffer a worse trade execution whilst another individual or entity benefits from a better execution, just because it is more convenient for certain institutions to report their short selling practices in the aggregate? It is wholly unfair and contrary to the requirement of best execution and so it should be a mandated requirement for transaction by transaction reporting. In conclusion, I support the Short Sale Reporting rule in its current format and recommend that this should be enacted in it's current format to help all manner of investors better understand the risks involved with the investments they are making, before they are making them.