Oct. 08, 2022
October 8, 2022
I want to comment on the SEC's proposed rule S7-18-21 for Reporting of Securities Loans.
Its noteworthy many large institutions are opposing this rule. Only those who are profiting from lack of transparency in lended securities would be incentivized to oppose such a rule. The only reasonable suspicion is that these intuitions are using short sales to drive a significant portion of their profitability.
I say this in the context of our country which touts free fair markets as often as it can, and as a capitalist investor. I do chose those words: capitalist investor with intention. Capitalism and investing go hand in hand and the activities associated with them lead to wealth creation and increased societal efficiencies. However, short selling is the opposite of investing, and as a strategy short selling contributes nothing in terms of wealth creation at best and destroys long term wealth at worst.
In short, short selling is an activity in opposition to the values of a free and fair market that seeks efficiencies and wealth creation. More troubling, powerful institutions are the primary opponents to this rule. These institutions already have access to data, resources, networks, and more that is exclusive to them verses individual investors. Continuing to allow such organizations to operate in anti capitalistic ways with no visibility into their short positions does not reflect the values of our markets.
Therefore I support more scrutiny and transparency around short selling up to and including the intraday 15 minute reporting requirement proposed by this rule as well as transaction by transaction reporting.
Therefore and in accordance with our values, I support the Short Sale Reporting rule in its current format and recommend that this should be enacted in it's current format.