Apr. 20, 2022
This proposal in no way benefits the retail investor (and is in fact detrimental to the retail investor), which the SEC claims to protect. By letting parties that have taken risks naked short selling securities avoid forced buy-ins (and liquidizing other assets in the process during "Fire sales"), this proposal serves to further prevent the market from actually being free and fair. In the event of a "fire-sale", the buying/selling of securities should affect the price on the lit exchanges. This is simply supply and demand. The NYSE has said that 90-95% of trades go to darkpools, which also results in the prices of securities not being reflective of supply and demand. This is a separate matter that the SEC should do something about, especially since the SEC claims to have the power to suspend dark pool trading. By passing proposals like this, it shows that the SEC wants to maintain the illusion of "free and fair markets" and not actually make "free and fair" markets a reality. Too long has naked short selling been allowed to happen under the guise of "providing liquidity." This obfuscation of providing liquidity only serves to undermine the principles of supply and demand by inflating supply and masking demand through flooding exchanges with naked short sold/ synthetic securities. Again this proposal in no way serves retail investors, only market makers, broker-dealers, and the like who have naked short sold securities and now desire to be free of their obligations to buy back the securities that were short sold. This is essentially a "get out of jail free" card for parties involved in these transactions/schemes in which huge amounts of Failures-to-Deliver are an integral part. Passing this proposal only serves to perpetuate the practice, allowing further manipulation of the financial markets at the cost of the retail investor. Thank you, Rob Hoffman