April 21, 2022
SR-NSCC-2022-801 003 gives market makers, brokers, and hedge funds a free pass to manipulate and distort the structure of the US stick market. If this rule is approved it allows bad perpetrators to launder illegal naked shorts and FTDs. The DTCC and the NSCC both know there are billions (possibly trillions) of dollars worth of Naked Shorts, FTDs and the like that need to be cleared. These rules were written to circumvent their obligations to reconcile their bad debt.
I regularly see post by the SEC touting that they have charged people with fraud for manipulating the market, insider trading, pump and dump schemes, among other things. Yet, the proposed rules basically gives permission to select organizations to perform illegal activities because they have the money and power to make laws work for them.
Brokers, hedge funds and the like have acquired debts they do not (or cannot) want to pay. A perfect example is Citadel owing (per their 2021 statement) over $65 billion in securities sold, not yet purchased, at fair value. So, rather than pay their debts like the rest of us, they make new rules to avoid them. In the process this will be the largest robbery of assets in world history. Comment on this rule has been pulled twice and this is the third attempt to push it through. If this were a retail investor he/she would have been margin called and their accounts liquidated already.
Yet no amount of revising can change the fact that this rule allows hundreds of billions of dollars to go unpaid while harming retail investors, retirement funds, mutual funds, and others.This is the 1% making rules because they made bad investments and want us to pay for it.
If I attempted a move like this, it would be considered money laundering and I would be charged with a felony offense. Yet, I dont have the power to simply change the rules to benefit self.
The passage of this proposal would give hedge funds, brokers, banks, and many others an even greater advantage over retail while further suppressing market transparency. The job of the SEC is to protect retail investors and I have not seen that in so far. The US market as it stands is an embarrassment to the world. It is neither free or fair. It is corrupt and political and it needs to be fixed ASAP