Apr. 21, 2022
To whom it may concern, I would like to voice my dissent regarding the proposed rule SR-NSCC-2022-003. Of particular note is the proposed existence of a “buy-in,” as noted at the bottom of page 19 and on page 20 of the Notice of Filing of Proposed Rule Change: “It is occasionally the case in the securities lending market that a borrower is solvent and able to satisfy its general obligations as they become due but unable to deliver the lent securities to the lender within the timeline requested by the lender. The contractual remedy that has developed in the bilateral securities lending market for these situations is a “buy-in.” Under this remedy, the lender may purchase securities equivalent to the borrowed securities in the market and charge the borrower for the cost of this purchase. This serves to benefit the lender because it allows the lender to recover the securities within its required timeline, and it benefits the borrower by avoiding a situation in which the borrower’s failure to perform under a single transaction results in an event of default and close-out of all of its securities lending transactions (and potentially other positions through a cross-default).” A borrower should be required to locate shares to return to the lender by buying them on a lit exchange – I believe anything else to be an evasion of organic price discovery. The role of the SEC may not be to protect retail investors, but it is the role of the SEC to ensure confidence in US markets. To not withdraw proposed rule SR-NSCC-2022-003 would do the opposite, diminishing trust in the fairness and integrity of our markets. Best regards, Nicholas Stanford