Mar. 23, 2023
March 23, 2023
As an individual retail investor and citizen, I am in opposition to the proposed rule S7-01-23. This rule would allow for the continuation of naked shorting loopholes, which would enable naked shares sold short to remain uncovered and unclosed.
To address this issue, I believe the SEC could implement two measures. Firstly, a legitimate share should only be allowed to be lent out once, never more than once. Secondly, every share sold short must be delivered within one month.
The current situation with short selling is getting out of hand, with historic levels of FTDs and shares being sold short without legitimate share locates. As retail investors, we witness this criminal behavior on a daily basis.
The proposed rule S7-01-23 aims to create loopholes for rules that were designed to prevent market instability, which would only lead to further instability if implemented.
Instead of creating loopholes, I urge the SEC to enforce the existing rules and prioritize the interests of retail investors over those of the banks that came up with this loophole to avoid their massive naked short sales.
Therefore, I strongly oppose the passing of this rule.