Oct. 08, 2022
October 8, 2022 Dear SEC, I am writing in strong support of the proposed changes outlined in S7-18-21 Reporting of Securities Loans. I must echo many of the sentiments of my fellow individual retail investors. Why we are even discussing these proposed changes seems, at best, simply a requirement of the rulemaking process of the SEC, or at worst, an opportunity for large financial institutions, hedge funds, or wealthy private investors to encourage a diminished version of these proposed rules. These are no-nonsense rules that bring much need transparency to a pattern of behaviours by large financial institutions that have long operated in the dark and continue to abuse American capital markets. The rules as outlined give much needed transparency into a very opaque system that has long been abused to the benefit of financial participants much better capitalized than traditional retail investors. Bringing to light abusive short-selling of securities is a significant concern for me and fellow investors. Without these rules in place, there is a clear pattern of abuse, wherein malicious actors are able to leverage delayed reporting rules or move securities in the dark. I strongly support the 15 minute intraday reporting interval, this is information that all market participants have internally in real-time, there is no sound justification not to provide this information to other market participants to determine risk and value. These rules afford retail investors, pension funds, and smaller institutions better clarity on the risks they are assuming by participating in US capital markets. Information is the key to sound investments, but without it, retail investors and smaller institutions are left in the dark, operating on half truths or no truth at all. These rules, if adopted, are a first step in ensuring fair access to information, and a more balanced investing landscape. The transaction reporting change is also very welcome. Aggregate transaction reporting is grossly opaque and unnecessarily muddies available information. Large institutions are motivated to conceal or obscure their positions, as many of them have shared in the comments here they ask for weaker enforcement and reporting, but why? If it is because they want to remain competitive by concealing positions or limiting their exposure in public, then these are selfish reasons that abuse not just financial regulations, but the markets in general and provide an unfair and un-level advantage to large institutions looking to take advantage of their scale or weak regulation to their benefit alone. If they do not need to operate transparently, why should retail investors be beholden to regulations that limit their participation more freely? This is not a recommendation to remove reporting requirements, but rather a simple counterpoint meant to highlight that without timely, correct, and transparent information, retail investors remain disadvantaged in American capital markets. There is no benefit to financial markets to hide the truth, especially when considering the systemic risks many of these institutions pose to market stability and longevity. Reading through comments in the proposed rule, some are from market participants who have had SEC enforcement actions taken against them, some repeatedly. Oftentimes the rule breaking they are accused of is directly tied to their unfaithful self reporting or failure to self regulate at all. They ask for weak rules because it benefits them directly at their bottom line, but they refuse to acknowledge the outsized impact their abuse of financial markets has on economic stability at large. Market rules that encourage and enforce strong transparency are a panacea to market corruption, malfeasance, and negligence. I urge the commission to adopt the proposed rule changes under S7-18-21, Reporting of Securities Loans. These rules are an encouraging and necessary step toward healthier, more stable, and more equitable capital markets for American and international investors and are a powerful tool for small scale and retail investors to have the critical information they need to assess risk.