Jun. 27, 2023
June 27, 2023 By Email Vanessa A. Countryman Secretary U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 205499–1090 rule-comments@sec.gov Re: Reopening of Comment Period for Modernization of Beneficial Ownership Reporting (File No. S7-06-22) Subject: Request to Implement a 2-Day Disclosure Deadline for Beneficial Ownership Interest Dear Ms. Countryman: I am writing this letter to express my strong support for the proposed rule updates regarding the disclosure requirements for beneficial ownership interest. While I applaud the efforts taken thus far to address this issue, I urge the SEC to go even further by implementing a 2-day disclosure deadline. This adjustment would not only enhance transparency but also mitigate the potential for market manipulation by large financial institutions. The current 10-day disclosure deadline, in effect since 1968, has become increasingly problematic in today's fast-paced financial markets. The elongated timeframe allows institutional investors to accumulate substantial ownership interests in public companies without timely disclosure, leading to unfair market practices and asymmetrical price information. Such practices undermine the principles of transparency and create an uneven playing field for investors. One recent incident that shed light on the urgency for reform is the Archegos case. The exemption of cash-settled derivatives from disclosure requirements enabled the accumulation of significant positions without triggering the obligation to report beneficial ownership interest. This lack of transparency not only distorts the market but also exposes unwary investors to unnecessary risks. It is imperative to close this regulatory loophole and ensure that all forms of ownership interest are subject to appropriate disclosure. The proposed rule updates put forth by the SEC are commendable and address many of the concerns arising from the current system. However, I strongly advocate for a shorter disclosure deadline of 2 days to create a fairer market environment and prevent market manipulation by large financial institutions. A 2-day window would significantly reduce the time available for the accumulation of additional shares beyond the 5% threshold before the public is made aware of the beneficial ownership interest. In addition, I fully support the inclusion of derivative disclosure requirements. Derivatives, despite not conferring beneficial ownership in the traditional sense, have the potential to exert substantial influence over the underlying securities. Ensuring that derivative holders are considered beneficial owners for the purposes of this rule would further increase transparency and protect investors from potential risks associated with undisclosed positions. Furthermore, I kindly request that the SEC provides explicit clarification in the updated rules that deeming derivative holders as beneficial owners will not result in any alteration to the voting rights or investment powers of the underlying referenced securities. This clarification would help address concerns and provide necessary assurances to market participants. In conclusion, I firmly believe that a 2-day disclosure deadline for beneficial ownership interest is vital to promote fair and transparent markets. By implementing this amendment and extending the scope of disclosure requirements to include derivatives, the SEC would take a significant step toward safeguarding investors and preventing market manipulation. I, therefore, urge you to consider these proposals seriously. I am not alone in advocating for these changes. Many investors and concerned individuals share these sentiments and are ready to support the SEC's efforts to enhance market integrity and transparency. I encourage others to join in this initiative by submitting their comment letters or signing this letter to demonstrate the collective strength of individual investors. Thank you for your attention to this matter, and I trust that the SEC will take decisive action to protect the fairness and integrity of our financial markets. I look forward to a future where transparency and accountability are paramount. Yours sincerely, Richard White Retail investor, teacher and father.