February 7, 2022
Dear Sir/Madam,
I am a Canadian retail investor and as a foreign investor I am in favor of this rule. However, it seems skeptical of any rule such as this actually working and being enforced. Let alone being respected to be upheld by every participant.
From observation over the past year, it has become increasingly obvious that Reg-SHO is largely ignored by broker-dealers and they continue to navigate the market unpunished. Or loosely punished at best with fines being small fractions of the total profits created. Where penalties become business costs and no longer a behavioral deterrent from financial crimes such as fraud.
It seems like your market is broken, with layers of issues happening at all levels of organization from the regulators, banks, financial institutions/hedge funds, brokers and congress all privy to incredibly enticing self-embezzlement. Such as: failure to deliver, abuse of settlement period, the ability to lend an underlying continuously through broker-dealer, control of sensitive information prior to public knowledge, and the control of narrative through media regarding a company, etc.
I am having my doubts such new rules will create compliance amongst the criminal abusers. Retail investors dont need new rules to go unenforced. We need to see gross abusers go to jail. We need real consequences that is upheld by integrity of the law and justice that retail would face if we were to be the ones to commit the crime.
Here is a quote the SEC should become well acquainted with: When setting expectations, no matter what has been said or written, if substandard performance is accepted and no one is held accountableif there are no consequencesthat poor performance becomes the new standard.
Due to the lack of consequences on Wall Street crime, gross negligence, and misreporting has become the new standard. Hyper-normalization of questionable ethics has become the acceptable level of financial markets of United States of America.
Although many parts are what make governance and oversight possible, this responsibility of correction lies upon your organization. Based on my observations of sentiment, retail is becoming aware of the back-door operations and becoming extremely unpleasant with their findings - this is an understatement. Trust is easily lost, and very difficult to regain.
I look forward to your promise on creating a functional and transparent market as the world is watching.
Yours truly,
Woo Seok Hong