Jun. 27, 2023
Dear Members of the Securities and Exchange Commission, As a household investor, I have concerns regarding the proposed rule S7-06-22, entitled "Modernization of Beneficial Ownership Reporting,". I would like to emphasize the need for increased public review of this lengthy rule proposal. I believe it to be of the highest importance to have greater public participation in the review process. Household investors don't always understand the rulings that are being proposed, where as financial industry commenters often guide rule proposals to serve their own interests. Extending the comment period would be ideal for household investors like myself to ensure meaningful input during this process. I do support the proposed amendments to revise filing deadlines. Shorter deadlines for disclosures can improve transparency, reduce delays, and minimize information that would put investors at a disadvantage. However, I am strongly opposed to the proposed amendments to Rule 13d-3, particularly the new paragraph (e). This amendment's goal is to allow holders of derivative securities to become beneficial owners, granting them the same rights as direct security holders. But derivatives settled in cash often result in cash payments rather than physical delivery of the underlying securities. Therefore, if you deem derivatives holders as beneficial owners, this will potentially increase the number of voting shares, diluting shareholder rights, further complicating an already complex voting process. The solution should be simple. Derivatives holders should not be deemed beneficial owners unless the derivatives directly convey voting rights and/or the power to cast out the underlying security. If market participants desire ownership rights, they should purchase the security directly. I hope the SEC will rethink this ruling and understand the implications that this will have on our financial system. Thank you for your time and those dedicated to a fair and transparent market. Sincerely, Kory Hendershot