March 5, 2022
As a retail investor, I would like to express my support for shortening the settlement cycle. For far too long have the DTCC, FINRA, and the SEC allowed financial institutions to use strategic fails to deliver in order to meet their financial interests or obligations. Based on the amount of company's making the threshold list on a daily basis its obvious this manipulative practice (strategic failures to deliver) is widespread fraud and manipulating companies valuations as a result. By shortening the settlement cycle, it will hopefully curb some of the manipulative practices that Prime Brokers, Market Makers, and other market participants are using to exploit the current settlement cycle. How are we supposed to have a 'free' market if institutions like Morgan Stanley and BOA can continuously fail to deliver securities when that securities price doesn't suit their financial interests. These institutions go as far to roll failures to deliver into future cycles to avoid regulatory penalties. This is taken even further when Market Makers (such as Citadel Securities) themselves have provisions that allow them to extend their failure to deliver cycle. It is well worth also looking into the loopholes for institutions to hide their FTD's. ETF's, options, CFD's, swaps, and plenty of other financial instruments are used to do so, even going as far as hiding them in derivative positions in off-shore brokerage accounts. When the only punishment for failing to deliver securities is at worst a slap on the wrist, institutions are incentivized to exploit the settlement cycle as they please. I would highly recommend shortening the settlement cycle to T+0 settlement as opposed to T+1. It goes without saying market participants will continue using failures to deliver in a manipulative and fraudulent way unless instant or same day settlement is established. Wall Street always finds a way to rig the system ahead of regulators and allowing them until 2024 will do just that. The deadline to establish a shortened settlement cycle should therefor be expedited to the end of 2022 or early 2023. Prime Brokers and banks cannot be trusted as the middleman in stock transactions if they are exploiting the settlement cycle for their own financial interests by failing to deliver securities even going as far to roll FTD's and circumnavigate them into future settlement cycles. They have done this for decades stealing billions from investors who don't have the luxury of failing to deliver securities if a trade isn't going their way. These financial institutions will continue to exploit the settlement cycle unless all the loopholes are closed. They have more than enough resources to implement a T+0 settlement cycle and there are plenty of technological solutions to making this happen in a timely and efficient manner. In summary, I support shorting the settlement cycle past T+1 to T+0 and in an expedited time frame of 2023 at the latest. For far too long has the current settlement cycle allowed for market wide fraud by financial institutions who strategically fail to deliver in order to meet financial obligations or to suit their own financial incentives.