Feb. 27, 2022
Dear SEC: I will keep my comments brief. T+1 is moving in the right direction to enhance settlement discipline but it is not sufficient. 1). SHO T+35 is a big loophole on settlement and it’s clear how it can be used to roll FTDs over. 2). Global market participants (e.g. Canada T+3) can be used to move FTDs around and create a bubble of FTD. If Canadian brokers cannot support T+1 (and eventually T+0) then they should be barred from trading. 3). DTCC has critical data that should be shared for every stock every day. Their databases show how many shares of every stock have been sold (Insider, Institutional, Street Name and DRS). That should be published daily. 4). DTCC should have formal legal responsibility to enforce buy-in. Make it part of their mandate. Seeing the daily publications will ensure that they take the right actions. 5). Individuals who mark shorts as long should be banned from participating in the stock market in any trusted capacity. 6). Synthetic shorts should be distilled from the options chain and presented by each broker as though they were actual shorts. 7). Companies that allow naked shorts to happen lack the discipline to work within the markets and should be suspended from doing so. Ultimately the DTCC, DTC and Market Makers should disappear. They are unnecessary in a technologically mediated market. Daryll Fogal