February 18, 2022
The proposed change to T+1 settlement cycles is a worthwhile change that is within our capabilities of the current digital age and should be approved. The sentiment of most retail traders appears to be that this should be T+0 but that, regardless, any delays only serve to extend the window of FTD settlement if the underlying security is so targeted.
What I dont see in this proposal is an action that cleans up the root problem that this proposal appears to be chipping away at: actual locate and delivery of the security itself and appropriate punitive damages assessed for those failures.
The word on the street is that there should also be zero exceptions for APs. Market makers, prime banks, and brokers in conjunction with the DTCC should easily be able to restrict trading (on an intraday basis) when liquidity dries up in a particular security and require the requisite buy-in by all parties within the same T+1 basis. Failure to require this of all parties neuters any proposed settlement cycle changes or at least makes them woefully incomplete. The historical evidence indicates APs are precisely the entities contributing to the problem that this proposed change attempts to address. Eliminate the exceptions and add a proposal that enacts severe punishment for FTDs and the commission will be on its way to real reform.
Thank you for your time.