February 8, 2022
Good day,
I am an international investor, and am in favor of this rule.
It has recently been exposed that Reg-SHO breaches are seen by broker-dealers as a cost to do business rather than as a deterrent for rule breaking. The cost of fines amounts to a fraction of the profit the broker-dealer would make shorting stock that should, by definition of REG-SHO, be off-limits to shorting.
The market appears to have failed in it's responsibility to investors, where broker-dealers seem to rule with impunity. Compliance among the habitual abusers will not improve by adding more rules, since they have proven that they do not need to follow the existing rules. What I feel is needed is tougher enforcement of the existing rules. Fines should not be a cost of doing business but seen as a deterrent to breaking rules that have been put in place for a reason. There is systemic negligence in the way that wall street acts, misrepresenting their positions, co-opting media in pump-and-dump schemes, dark pool abuse, naked shorting, and ignoring the rights of investors, because they know if they get found out, the punitive action will be offset by the profit made.
Until the dark pool abuse is resolved, hidden positions in married call/puts, and naked shorting are prevented I believe that trust in the American markets will continue to diminish and small-scale investors like myself will have no option but to stop investing in the American markets, moving to European markets where there is a greater deal of enforcement, or further increasing positions in Crypto, and potentially DeFi as it becomes available.
Kindest regards,