June 25, 2023
As a household investor, I strongly oppose the proposed SEC rule that would include beneficial ownership based on derivative ownership. This amendment would have a detrimental effect on shareholder rights. By deeming holders of cash-settled derivative securities as beneficial owners of the reference equity securities, the proposed rule fails to acknowledge the fundamental distinction between derivative ownership and direct ownership.
Derivative ownership does not grant the same level of rights and responsibilities as direct ownership of equity securities. Shareholders who hold derivatives should not be granted the same status and influence as those who hold the underlying securities directly. This proposed amendment would blur the line between direct shareholders and derivative holders, potentially diluting the power of true shareholders and undermining their ability to exercise their rights effectively.
Lastly, the proposed exemptions for groups of individuals forming a collective entity would further complicate the regulatory landscape. While collaboration and joint engagement can be beneficial, granting exemptions to such groups without subjecting them to regulation as a group raises concerns about potential abuse and manipulation in the market.
In conclusion, as a household investor, I firmly oppose the inclusion of beneficial ownership based on derivative ownership as proposed by the SEC. This amendment would undermine shareholder rights, and create ambiguity in the market. The SEC should reconsider this proposal and prioritize the protection and empowerment of individual investors in the modernization of beneficial ownership reporting rules.
V/R,
Dennis and Mary Spohn