Mar. 23, 2023
March 23, 2023
As a retail investor, I strongly oppose proposed rule S7-01-23, which appears to create a loophole allowing naked shorting to continue without the requirement to cover or close those positions.
I urge the SEC to take action to fix this issue by implementing two key measures. Firstly, a bonafide legitimate share should only be lent out once, and not more than that. Secondly, every share sold short should be forced to be delivered after a period of one month.
I am concerned that short selling is currently out of control, with historic levels of fails to deliver and shares being sold short without finding legitimate share locates. As a retail investor, I have observed this activity on a daily basis and believe it is a crime.
The proposed rule S7-01-23 seems to create loopholes for existing rules, which were designed to prevent market instability. If this loophole is created, it would only lead to further instability. Therefore, I strongly urge the SEC to enforce the rules that are already in place and to choose the side of retail investors over the banks that created this loophole to give themselves an out for their massive naked short sales.
In conclusion, I urge the SEC to reject proposed rule S7-01-23 and take measures to enforce the existing rules, which will protect the integrity of the market and promote fairness for retail investors.