Oct. 31, 2022
October 31, 2022 Loaning securities is not conducive to a fair, orderly, and or efficient market. Securities lending directly hurts retail investors by replacing shares owned beneficially with what is essentially an IOU. This IOU then harms market efficiency by inflating the numbers in circulation which hampers true price discovery by artificially increasing supply. The proposed rule will increase the cost and reporting burden of borrowing securities which will which could have the consequence to tilt the brokers cost/benefit analysis in favor of a FTD which should not be tolerated in any healthy market structure. Yet here it seeems to be encouraged. The Dodd-Frank act directed the SEC to seek transparency for brokers, dealers, and investors. But the retail investor has been given the short end of teh stick with this proposed rule. The disclosure of lending inventory and near real time position reporting will only make it possible for broker dealers to discriminate against companies who are already bearing an onslought of phantom shares in capital markets.