Oct. 31, 2022
October 31, 2022 RE: File Number S7-18-21 Let me begin by stating I don't necessarily disagree that short selling is bad for markets. However I have a big problem when the trades are not tracked and reported on timely, accurately, and publicly. Institutions should have to post their short positions along with swap positions just as much as their long positions. Their positions need to be audited by an independent third party who is at risk for going to prison should they discover fraud or serious errors on extremely leveraged positions. The risk to the public and economy as a whole is too great to not have better oversight over bad actors. Failure to deliver should also not be a thing. When a broker or market maker fails to deliver the asset, due to a naked short sell, there should be a bigger punishment than just a fine. The punishment needs to deter bad actors from engaging in the naked short itself. It can not just be a cost of doing business. Also, when a security is marked short and the asset is lent out, the majority of the benefit of lending the asset should go to the person who owns the asset not to the broker. The lions share of the interest should go to the owner of the security. The owner of the security should also be allowed to not lend the asset out against his will. The brokers who make money off of this should be responsible for tracking who the asset was borrowed from and lent out to. The owners of securities who lend their shares should be able to look up who is borrowing their shares and how much interest is being made on these borrowed shares. It needs to be more transparent, timely, accurate, and easy to look up.