June 25, 2023
As an international investor with a keen interest in the global market, I am in favor of the proposed Rule S7-06-22. Its implementation would bring about a more balanced playing field for ordinary investors, which I believe is essential.
I have closely observed the volatility of stocks, witnessing wild fluctuations akin to roller coasters whenever ownership filings are disclosed. During such periods, it is not uncommon for a filer to swiftly sell their holdings, reaping significant profits due to algorithmic adjustments that follow these filings. This behavior closely resembles a \"pump and dump\" strategy, which should not be allowed to persist.
Moreover, it is worth considering Chair Gensler's assertion that roughly 97% of trades made by household investors never reach a lit exchange. By ensuring that all trades occur on transparent exchanges, we would eliminate the need for algorithms to artificially manipulate prices to correct for ownership values. This shift would introduce genuine price discovery, which has been lacking for decades.
One aspect of the proposed rule that particularly resonates with me is its requirement for regulatory filing of derivative positions. This measure has the potential to expose fraudulent activities, such as manipulative short covering through options contracts or excessive swap positions, as demonstrated by the Archegos incident.
In conclusion, I wholeheartedly support the implementation of this rule. It addresses crucial issues and would contribute to a fairer and more transparent investment landscape.