Oct. 09, 2022
October 9, 2022
I am an individual investor involved in the U.S. stock market. I am writing to you today to express my opinion on the proposed rule: \"S7-18-21 - Reporting of Securities Loans.\"
I have seen that several major institutions have already commented on this regulation, suggesting that there should be a modified version of this rule, or even a complete removal of this same rule. Another vexatious move from those who are trying to extract as much money as possible from small investors, where they are working in the dark with as little identification and transparency as possible. They have even gone as far as saying this rule would be bad for individual investors like myself. Ridiculous. The only thing these companies are interested in is making money off the backs of individual investors with the highest profit margin possible. They are patrolling your website with backwards statements that are to their advantage.
The presently announced regulations would greatly help individual investors, pension funds, and will provide more transparency to the current market. This rule gives more clarity about the risks that go along with investing, and allows individuals to make more critical decisions with their investment and how they should invest.
When short selling practices occur in the dark and 'current' short sale information is provided long after a position is entered into, retail investors and the like cannot be aware of the risks that they take on when buying securities.
You can understand why this lack of information is a problem for all investors, who are expected to invest based on incomplete and dated information about short selling. I support the need for the 15-minute reporting requirement. The cost and effort involved is justified to help detect abusive short selling at the earliest stages, to limit the ability of toxic market actors to hide behind regulatory loopholes, and to try to prevent such abusive practices in the financial markets.
The new rule would also provide any aggrieved companies with more avenues to defend themselves against predatory short selling, as short selling in the dark harms legitimate competition and price discovery. Adopting this rule would allow the general public and public companies to act as the SEC's vigilance as the first line of defense against abuses as well, by allowing them to more accurately monitor short selling for securities fraud for the securities in which they invest, thereby enhancing the SEC's ability to fulfill its mandate and disabling market participants who violate SEC rules at no additional cost to the SEC.
I strongly support transaction-by-transaction reporting. It is clear that aggregate reporting is not transparent and provides far too many opportunities to hide fraud in aggregates. Why should one individual or entity suffer from worst execution while another person or entity benefits from best execution just because it is more convenient for some institutions to report their short selling in the aggregate? That is grossly disingenuous and contrary to the best execution prerequisite, which is why it should be a mandatory transaction-by-transaction reporting requirement.
In short, I strongly support and commend the Short Sale Reporting rule in its current form to help all kinds of investors better comprehend the hazards of their investments prior to making them.