Subject: S7-18-21: WebForm Comments from nationwide anesthesia associates
From: Anonymous
Affiliation: ceo

Oct. 18, 2022

October 18, 2022

Securities lending enables the multiplication of shares in circulation. When
brokers lend the shares being held for retail investors, for example, it is equivalent to
replacing the bought and paid for shares with an IOU.

Securities lending ignores the
investors right to vote in matters of corporate governance and to receive tax-qualified
dividends.

Further, a fail-to-deliver (FTD) that is closed with a borrowed share is not really
closed  it leaves open that IOU with the lender.

Therefore, securities lending harms market
efficiency by inflating the number of shares in circulation, which hampers true price
discovery by artificially increasing supply.
I can think of no other industry in which anything of value is lent without a due date for its
return.

Nothing in this
proposed rule fixes the problem that voting rights and payments in lieu of dividends
continue to be allocated in processes that are completely opaque to investors.
It seems likely that the Proposed Rule will increase the cost and reporting burden of
borrowing securities, regardless of the reason for taking the loan (e.g., to cover short sales,to close a fail-to-deliver, to access voting rights, etc.). An unintended consequence could be to tilt the brokers cost/benefit analysis in favor of fails to deliver.

The subject proposed rule enables and perpetuates on-going systemic problems. Real
reform for securities lending must include:
(1) Notifying the public about who is borrowing and lending shares (not just which
companys shares are being borrowed or lent).
(2) Notifying retail investors with street name shares that their shares are being lent,
(because (a) they don't get to vote and (b) they don't get tax-qualified dividends). SEC must
adopt a more consistent interest in regulating, monitoring, and enforcing rules that require
brokers to keep accurate records of ownership.

Thank you for your time and your understanding as I utilize the ability to comment from a mentor with much greater understanding than my own.