Feb. 23, 2023
February 23, 2023
Dear Securities and Exchange Commission,
I am writing to you today as an individual investor to suggest some crucial changes to the rules that govern the securities market. As someone who is deeply invested in the market, I believe that the changes I recommend would help improve transparency, accountability, and fairness.
My first recommendation is to move towards a T-0 settlement cycle. The current T+2 settlement period can create counterparty risk and limit the speed of capital deployment in the markets. I strongly believe that an almost instant settlement cycle would reduce systemic risk and enable market participants to deploy capital more efficiently. With today's technological advancements, a T-0 settlement cycle is now possible.
I also recommend that the SEC abolishes the practice of Failure to Deliver (FTD) and impose significant fines for failure to comply. This would hold market participants who short securities accountable and ensure that they cover their positions in a timely manner, avoiding potential market manipulations.
Furthermore, I suggest that the SEC abolishes the practice of Rehypothecation, as this can lead to systemic risks and investor losses. As the mission of the SEC is to protect investors, I believe that the abolition of this practice is a necessary step.
To level the playing field for all market participants, I recommend modifying the rules so that block trades do impact the price and price discovery. This would eliminate information asymmetry in the markets.
Additionally, I recommend that all retail trade orders be routed exclusively to Lit exchanges, rather than continuing to allow internalization or off-exchange transactions by market makers. This would help improve transparency and ensure a fair market for all participants.
Lastly, I urge continuous regulation and monitoring of exchanges by the SEC, requiring accurate reporting of all transactions within minutes after positions are taken. This would promote transparency and accountability in the markets.
Overall, these changes would enhance the integrity and fairness of the securities market, protecting investors and improving the efficiency of the market. Thank you for your attention to this important matter.
Sincerely,
Michael G.