Apr. 20, 2022
Dear SEC, SR-NSCC-2022-003 and some 801 varient are stupid rules. Security Financial Transactions (SFT) are another complication in a needlessly complicated system. Instead of rolling Failure to Delivers in a bundle, all FTD buy in should be mandatory after a week. No exceptions. At some point institutions have to pony up the shares they promised, and shouldn't be able to pass around IOU for stock like a filthy whore. Additionally, the SEC should ban darkpools, and PFOF. To better handle the FTD issues, institutions that failure to deliver on a stock more than 3 times in a 30 day period should be banned from all shorting until an audit of their books is complete. At the sametime, all shorting should be limited to the first day of each trading week, to limit all the price distortion of shorting. Another option would be to force the internalization of all short positions that the broker would agree to take on, with appropriate risk assessment. No additional sell pressure would enter lit markets, and the broker would pay out short positions only when the position is closed. Finally, I have yet to see rules addressing the conflict of interest when a market maker owns a hedgefund, particularly Citadel. It impossible to fairly direct orders and make markets when there is an interest in the decrease or gain of specific securities. Please force all market makers to give up their hedge fund arms, and prevent them from operating in the same building. Sincerely, Zach Kolansky