Apr. 20, 2022
Dear SEC regulatory employees and public servants: I've read through the proposed rule SR-NSCC-2022-801 and the rule proposes institutionalizing corrupt practices under the guise of streamlining investment product delivery protocols. These proposals destroy the very foundation of what an investor is supposed to trust when it comes to price discovery on their investments. Rule 801 disallows the formation of resource scarcity - the most critical component of value making in our markets. By creating a vehicle for cash equivalent equities wrapped up in yet another convoluted securities package, why would share allocation recordkeeping and share locate requirements even matter? Effectively allowing Failure To Deliver (FTD) to continue without any mechanism to locate shares and provide delivery within a set timeframe allows for some companies to be traded irrationally into oblivion with zero investor recourse. Overly complex derivatives, overleveraged ETFs, and other financial products already delay and obscure effective oversight by the SEC, and function to can-kick obligations to provide security settlement. The removal of accountability in a market that is already cornered by too big to fail insiders places not just the whole of our market integrity at risk, but these players are seeking to clearly attach their own existence to the stability of the US economy as a whole. Look to those who support this rule and examine their history of violations - only those who would seek to support this rule could ask for this flaming insult to market structure to pass. Specifically, the Security Financial Transactions (SFT) proposed in this rule create more packaged products to further obfuscate and delay already opaque settling cycles. Should a bad bet be always be effectively bailed out by allowing the SEC and other regulatory agencies and companies to legally ignore bad faith / predatory trading? The answer had repeatedly been a resounding no, as put forth in most stock trading regulatory acts of yesteryear. Rolling back regulations has repeatedly violated our rights for a free and fair market and here is another rule asking to effectively remove functional oversight on complex instruments and enshrines robbing peter to pay paul with broad equivalents rather than the simple securities that are owed. I hope this rule is rejected by educated investors en masse and rejected by the SEC and those who are considering its adoption. I understand the mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. Please answer how a rule such as 801 would contribute to that mission in any way? As a test, I searched the proposal document to find any terms relating to Consumer or investor protection, using only "protection" as a search keyword, with 5 instances of returned results. While the rule states that it is compliant with Dodd-Frank Wall Street Reform Act, it does not say how other than with the rule filing procedure. The rest are redacted or provide no reference sources. This leads me to conclude that this rule was written without investor protection in mind at all. Again, I searched for "stability" and found a number of instances of this term used in the context of the NSCC supporting broad financial market stability. However, I fail to see how this rule does anything but help the self regulatory member companies that comprise the board and functional operation of the NSCC and the DTCC to protect themselves from their own bad investments. At best this rule is incomplete, intentionally vague, and poorly envisioned. As it reads now, it lacks basic language to protect retail investors and non-member brokers from predatory trading. It supports the notion of a gambling house that not only never pays on bets it lost, but potentially provides only an equivalent settlement in inflated cash in lieu when they do transact settlement. What happens to the shares of a company a consumer likes and specifically invested in? This rule drops the ability to keep track of share ownership. Why would anyone invest in a system that can not guarantee delivery of the product it trades in? Sincerely, J. Daniel US Citizen Retail investor