Oct. 08, 2022
October 8, 2022
I am a private, individual trader, a so-called retail investor, and am in strong support of your proposed file nr. S7-18-21 for Reporting of Securities Loans.
One of many problems in todays stock market is that institutional traders are abusing their ability to short companies, where they sell short outside of market hours, in a predatory fashion.
As an individual trader, I can neither short a position, nor can I trade outside of market hours.
It is in the interests of institutional traders to not report their short positions.
The obvious question is, why would institutional traders not wish to report their short positions?
The obvious answer is, quite simply, to avoid scrutiny.
Where scrutiny would mean accurate price discovery for others, whilst at the same time exposing price manipulation, where market manipulators spread false information about a stock they sold short in order to profit from a resulting decline in that stocks price.
The simple fact is that the transparency that would come with the proposed 15 minute reporting, would put a stop to a lot of the abuse, and it would encourage real price discovery, and it would simultaneously expose any price manipulation.
Furthermore, transaction-by-transaction reporting would eliminate the ability of short sellers to hide within their aggregated positions.
In short, transaction-by-transaction reporting in 15-minute intervals, would be beneficial to private investors, i.e. working families and everyday people who are encouraged to believe that the stock market is a reflection of the classic supply and demand model.
The final argument for 15 minute reporting is that is gives shorted, victimized companies the ability to recognize fraudulent and abusive short-selling strategies, and therefore allows them to defend themselves against predatory short selling.
Two changes are essential, and both would be addressed by the proposed file Reporting of Securities Loans, namely true price discovery, and the protection of investors.
P.S.
My comment is rejected if I enter my own phone number (+49-163-1609), so I used the first SEC phone number that I found online. I apologise for that.