Apr. 20, 2022
For the Attn of The S.E.C. Ref: SR-NSCC-2022-003 This is clearly an attempt by hedge funds and other short sellers to evade their responsibilities in the markets regarding naked shorts and ongoing FTDs. It does so by introducing a new transaction layer that “novates” (replaces) old obligations b/w NSCC member lender / short sellers / prime brokers / etc. with a new obligation b/w a member and the NSCC itself as the new counterparty. This novation is done with even more lending of securities. The NSCC has the information to show that there are many FTDs and naked shorts that legally need to be cleared. This rule is nothing more than a backdoor out of the hedge funds obligations with a bin provided for your previous contracts and someone to give you new shiny ones. It is not acceptable, it is a corrupt notion in a system that is already heavily weighted in their favour. In short this rule means they can never lose and continue to cheat. I would further point out that this has been withdrawn twice already. It is terrible for retail and would make retail investment untenable. I await this comment section to be flooded by hedge fund MBAs who will use complex, confusing data, but mainly tautology and sophistry to try to win this argument. I implore you to deny it. Ian Woodward (UK)