Oct. 30, 2022
Re: Release No. 34-93613; File No. S7-18-21 Proposed Rule: Reporting of Securities Loans Ms. Countryman: I am a U.S. citizen writing to you today to express support for the passage of proposed rule 10c-1. I support transaction-by-transaction reporting of securities lending and short sales because aggregate transaction reports are inherently less transparent than reporting on a per-transaction basis. I support the 15-minute reporting requirement, as the costs and effort required to implement it are minimal - the transaction data is already digital anyway - while more frequent reporting is justifiable as it helps to prevent manipulative short selling practices and provides investors with up to date information with which to make investment decisions. If funds are allowed to lend securities for short sales with minimal and infrequent reporting, individual investors cannot make an accurate assessment of risks when purchasing securities and protect themselves from abusive and predatory short selling practices. Individual investors and working families do not have the resources or time to buy high quality market data and perform analysis upon it - as such they are at a huge disadvantage to larger market participants (e.g. hedge funds) that frequently employ PhD level mathematicians, physicists and data scientists to process market data and execute investment strategies. More frequent reporting of securities lending, helps level the playing field for all investors, regardless of capitalization. Lending of securities for short selling and subsequent rehypothecation can lead to chains of obligations between short sellers that pose risks to the economic stability of the entire financial system. Risks are further magnified when combined with infrequent reporting, persistent fails-to-deliver, lax oversight, and abuse of leverage (cf. Archegos, Greensill, Softbank etc...). Better transparency here, as in proposed rule 10c-1 would help to reduce some of these risks and increase confidence in domestic equity markets. Please approve and implement this rule immediately to ensure fairness, stability, and transparency in U.S. equity markets. Regards, Roscoe T. H. Linstadt, PhD.